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Networking’s Many Facets On The Table In 2006

The home networking category will be an interesting market to watch in 2006 as companies head off in several different directions, with some plunging ahead with pre-802.11n products while others pile onto the networking peripherals bandwagon, introducing boatloads of gear that operate on top of a home network.

The big story for the year will be what happens in the pre-802.11n market. In this sense, the wireless networking action that will take place in 2006 will mirror last year’s market. Vendors will continue putting out products in pre-11n, MIMO or Super G — depending on which nickname you prefer. But the fact that the 802.11n specification will not be ratified before the end of 2006 has created two distinct camps in the category. Those supporting the Airgo Networks chipset, like Netgear, are squaring off against those allied with the Enhanced Wireless Consortium (EWC).

While this format war should not be a long, drawn-out affair compared to what the rewritable DVD category endured, it could lead to consumer confusion with some getting stuck with incompatible networking products, several vendors said. The primary danger of releasing products before the specification is ratified is that these products will be so far removed from what the industry will ratify that they cannot be upgraded through a downloadable firmware patch. This will stick consumers with products that are not cross-compatible with devices made by different vendors.

Both methods will deliver 100MBps wireless data rates.

“This is going to be an interesting battle,” said Steven Joe, CEO of D-Link, “We believe in the standards backed by the EWC.”

What Joe expects to happen is for the companies that now support the EWC to dominate the final voting 802.11n standard ballot. Since more companies are now in the EWC camp than with Airgo, he expects products made and shipped this year by EWC vendors to closely match the final industry standard and thus be upgradeable.

“We will be pushing the [standards] committee to finalize 11n,” said Malachy Moynihan, Linksys’ engineering and product marketing VP.

Linksys sees a strong consumer demand for 100MBps data rates by the end of 2006, making it imperative that an industry-wide standard is in place as soon as possible.

Jonathon Bettino, Belkin’s networking product manager, agreed saying he expects a flurry of pre-802.11n product to hit retail at the end of this year with the majority of it being able to be upgraded to the final specification.

Outside of new home networking technology, the category’s primary driver is VoIP telephony products. Every vendor expects 2006 to be even bigger than last year for VoIP sales.

“In 2005 we saw a serious effort by the industry to take advantage of broadband general consumer acceptance, and in 2006 we expect more telcos to come on board,” said Gunjan Bhow, Actiontec’s marketing VP, adding that VoIP has finally been embraced as a mainstream product by consumers.

Bhow said current trends lead him to believe VoIP eventually will become universally popular. To support this theory he pointed out that cable companies in Minneapolis and Houston now have more telephone customers than the local telcos.

“The industry is really changing,” Moynihan said. “People’s minds are expanding in regard to what a network can do and VoIP is a great example of this. Vonage already has a million subscribers, and we will build VoIP into more of our products.”

In fact, peripherals such as phones are becoming the focus point for companies like Belkin and Actiontec.

Bhow described Actiontec as more of a company today that develops products that operate on top of a network.

“The business is changing. We have to increase the amount of revenue coming from each home, and we can’t do that on a $20 DSL router,” he said.

Belkin has not gone that far down this path, Bettino said. But even at this point, he can foresee a time when the company will shift its business to providing solutions for other companies to integrate their products into a network.

In the meantime, Belkin is forging ahead with its current line of products. Bettino said 2006 will see more consumer electronics companies rolling out network-ready products to take advantage of 802.11n and the expected availability of downloadable programming.

“We will see more wireless [equipped] displays in 2006 and the first mass deployments of devices with media clients built in so the TV can talk directly with the computer,” Bettino said.

The biggest roadblock for this scenario is content. Digital rights are still an issue, but progress is being made. Moynihan pointed to the Apple video-capable iPod as a positive step and Linksys is working with Hollywood to open up that door.

“We are working with the movie industry — that roadblock is slowly going away. Hollywood is beginning to understand that the world is bigger than video stores and movie theaters,” he said, adding that because these behavioral changes are taking place, 2006 will see a rapid increase in content that can be downloaded to a PC or dedicated box and then wirelessly distributed throughout a home.

Other networking areas such as ultrawideband, Wireless USB and HomePlug products are proving impossible for the industry to kill off despite numerous accounts indicating that niche was on its last leg.

D-Link’s Joe said ultrawideband is needed to increase bandwidth on a local scale, essentially eliminating cable connections between CE and PC devices. The as yet unset standard can deliver a 480MBps data rate at two meters and 110MBps at 10 meters. Because of the range limitations, vendors expect UWB to find a home among single-room systems, like home theaters.

“The problem is the forum support for it has been very slow,” Joe said.

A variant of UWB is Wireless USB. It has the same data rates, but instead of being built into a device, it uses USB 2.0 ports to convert legacy products. This can eliminate wires from PC peripherals. Bettino said Wireless USB should be out by midyear, such as USB hubs and dongles for connecting printers to the network.

HomePlug will continue to make inroads, particularly for its ability to move high density content like HDTV programming around a home, said Bettino and Joe.

Vendors are also moving forward on more mundane, yet important, issues such as simplifying network installation and setup. With more and more networking products being bought in mass merchants by technologically uneducated customers, tech support calls are still a growing concern.

To battle this, there is an initiative from the Wi-Fi Alliance to establish an industry standard for network set up, Moynihan said.

“We are working on reducing the number of ‘touches’ it takes to install a product,” Bettino said. With the level of consumer knowledge so low, it is not unknown for a tech support person to have to start a call with telling the customer to open the box.