twice connect
careers

Retailers Are Gearing Up For Home Network Boom

2/25/2002 02:00:00 AM Eastern

With the once-futuristic promise of being able to link all of a home's electronic equipment and systems with each other and with the outside world on its way, retailers are, in varying degrees, gearing up for what most agree will be a true home networking business at some point down the road.

When that point "down the road" will be is still open to speculation, since the status of home networking today is not where many thought it would be, based on technology advances and predictions of just a few years ago. A slowing economy, the dot-com busts, and the slower-than-expected takeoff of broadband have all put the brakes on what was anticipated to be rapid progress to this point.

There is little question in anyone's mind, however, that the day will come — perhaps with a leap forward as early as this year, perhaps in another three to five years, depending on whose opinion is gleaned. Either way, the topic is top-of-mind for most retailers, who are eager to be ready to capitalize on the business by laying their groundwork today.

"From what I see, retailers and installers in general are reading a lot, taking classes, and paying attention to what's in development for home networking," said Jeff Hoover, president of Audio Advisors and current president of CEDIA. "There is a huge business right now in the structured wiring end, preparing homes for what the future will bring. A few years ago, it looked like that future would come more quickly than it has. But even so, everyone is paying a lot of attention because of the impact they know it will have on their business."

CEDIA defines home networking as "the technology that allows all electronic devices in the user's environment to seamlessly communicate with each other and the outside world." Hoover further defines four stages of home networking. It evolves from a PC-centric network primarily for sharing of peripherals and the Internet, through an Internet appliance stage with entertainment the driving force. Then it eventually goes to the stage where the network encompasses all electronics, with transparent synchronization of remote devices, and seamless residential gateways that handle multiple bandwidths and multiple technologies.

"Right now, we're just getting past the PC-centric stage, which is still what most people think of when you say home networking," Hoover stated. "For custom installers selling a solution, that's a great add-on right now. And for the bigger retailers, it's turned into a fairly commoditized business of routers, hubs and so on, sold relatively cheap."

While not ready to discuss specific plans or direction, both Best Buy and Good Guys affirm that they are exploring opportunities for wider merchandising of home networking in 2002. And Circuit City has set the stage by turning over some of the floor space freed up when it exited the appliance business in 2000 to an expanded assortment of home networking products.

"In addition, last year we added a broadband station, designed to be a one-stop shop for people looking for broadband access and solutions," said a Circuit City spokesperson. "We offer a variety of wired and wireless networking products, and it lets us provide people with all the products that can benefit from broadband, including home networking. It's a category that our customers would expect us to have as a retailer of computer and broadband, and a logical next step for consumers to take with their equipment."