Wi-Fi 'Homes' In On Consumers

By Ed Sutherland

January 21, 2004

The allure of the home network has quickly shifted from Internet access for all PCs to using wireless to run the home entertainment.

Why are Wi-Fi vendors that are more accustom to unwiring databases for corporate number-crunchers interested in your Fifty-Cent CD and that Finding Nemo DVD? Cisco, Intel and others see Wi-Fi as the link between the digital home and a search for untapped markets.

"Broadband connections can offer a whole lot more than just swifter data downloads and [thus] a brand new market for Wi-Fi-based entertainment services is developing," said Ian Cox, author of a BWCS study entitled "Wi-Fi Home Networking -- The Emerging Broadband Home."

The report predicts by 2007 50 million homes in the United States, Europe and Asia will turn to Wi-Fi for home networks.

Chip making giant, Intel , already heavily investing in Wi-Fi, got the message. On January 7, the company announced plans to invest $200 million in the digital home.

People "want to wirelessly transfer MP3 files from a PC in the den so they can listen to them on their stereo in the family room; they want to view digital photos on their big-screen TV, or to watch video on handheld devices," said Louis Burns, Intel vice president and general manager of the Desktop Platforms Group.

Intel's Digital Home Fund follows a series of moves aimed at gaining leadership in the lucrative $1 billion Wi-Fi chip market. With Intel microchips inside 82% of desktop PCs, the chipmaker aims to replicate that success in the wireless sector.

Intel's campaign to gain wireless leadership includes a $150 million investment in Wi-Fi startup companies, $300 million devoted to advertising its Pentium M with Centrino chipsets for laptops, and the upcoming Grantsdale chipset allowing Intel-based PCs to replace access point hardware.

While most home-networking has been limited to exchanging data or sharing Internet connections, consumers cite swapping media as the prime use for future home wireless networks.

"More and more consumers see the clear benefits of home networking. They'll share pictures and music across multiple digital devices, and will integrate new-to-market products into their networks," said NPD Group's Stephen Baker. The research firm found 40% of consumers planning to install a home network in the next year would use it to share pictures, music and video. That's up from 33% for current home-networks.

Wi-Fi will quickly displace Ethernet as the preferred standard for home networks. The survey indicates while 22% of current home networks use Ethernet, 40% of planned home networks will employ Wi-Fi.

"Nearly 80% of those not planning to install a home network cited lack of need while half noted that they didn't have enough suitable products," said Baker.

At the Consumer Electronics Show in Las Vegas, a number of wireless vendors -- including Cisco's Linksys subsidiary -- were hawking gadgets making it easier to create home media networks.

This is only the tip of the convergence iceberg. PC companies, faced with the prospect of their wares' plummeting prices and a future where their products become inexpensive commodities, see consumer electronics as the land of milk and honey. Consumer electronics folks, witnessing the trend toward home media networks, see the PC market -- especially the wireless sector -- as the glue binding all those DVD players, MP3 gadgets and the other toys of the media junkie. Now that's entertainment.



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