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Set-top boxes, home networking grow up

January 2, 1999
Web posted at: 7:47 a.m. EST (1247 GMT)

by James Niccolai

LAS VEGAS (IDG) -- Set-top boxes designed to enhance plain old television and home-networking products that link PCs with other electronics are expected to take center stage at the Consumer Electronics Show here next week.

More than 1800 IT computing and consumer electronics firms will show their wares at the event, which runs from January 7 to January 10. They will show off the latest in mobile electronics, home automation systems, satellite technology, computing, home networking, and entertainment systems.

Many products reflect the ongoing convergence between telecommunications, the PC industry, and consumer electronics, said Roger Gulrajani, Microsoft's group product manager for PC companions for Windows CE.

"Companies are asking, 'How do we extend the information on PCs to new classes of devices?'" Gulrajani said.

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While consumers traipse through the show aisles and gawk at the latest products, consumer product makers and technology executives will schmooze behind closed doors. They seek partnerships and licensing deals to bring their technologies to truly mass markets.

A PC can call the TV

Two prominent players in the emerging wireless home-networking market, Proxim and ShareWave, will both show their latest wares. Home networking will move from the fringes to the mainstream in 1999, one analyst said.

"It seems to be a market that's really beginning to open up. A lot of the smaller companies we've talked to in the last year have finally finished their product development and worked through their bugs," says John Armstrong, chief networking analyst with Dataquest.

Increasing numbers of homes with more than one PC is one factor driving this market. So is the availability of movies, music, and digital content on DVDs and the Internet, says Bob Bennett, ShareWave's vice president of marketing.

ShareWave, a Silicon Valley startup backed by Intel and Cisco, among others, is a forerunner with its wireless broadband technology that lets consumers link PCs and peripherals, as well as share a single Internet access point among devices. The company's software and chip sets, which it sells to electronics manufacturers, use MPEG compression to produce 120 megabits per second throughput. With it, a PC can broadcast digital movies and other content to appliances around the home, Bennett said.

At CES, ShareWave will offer a first glimpse of the reference specification for a new type of network appliance it has designed for the home, Bennett said. ShareWave won't describe the device yet, although company literature outlines plans for a "kitchen pad" -- a flat-panel viewing screen that could, for example, show a DVD movie being played on a PC elsewhere in the home.

Earlier this year, Philips Electronics licensed ShareWave's technology for its AMBI home networking system. Philips' product is due to debut early next year, priced between $500 and $700.

ShareWave rival Proxim, meanwhile, will show its Symphony networking system for PCs and notebooks, as well as its wireless Windows CE technology for handheld computers. Introduced in November, Symphony includes an ISA card, a PC Card, and a modem.

Net appliances

Set-top boxes will be on display from industry leaders such as General Instrument and Scientific-Atlanta. These nebulous products make television a more interactive experience, often using an Internet connection.

"This is the first true Internet appliance that will come into the consumer space," said Dataquest analyst Van Baker.

But Baker thinks the CES buzz will be around two smaller companies with limited function set-top boxes. Replay Networks and TiVo both offer appliances that record television programs on command, saving them on a hard drive in the set-top box. The systems have VCR-like controls.

TiVo and Replay Networks "offer a really logical progression to convergence because they take a lot of computer technology and apply it to television in a manner that is very easy for the consumer to understand," Baker said. "I don't think it makes sense to bring more feature-rich boxes to market until people know what the future wants."

As firms like ShareWave and TiVo preen their technologies for consumer markets, they also seek to strike deals with consumer electronics firms. Consumer giants like Hitachi, Philips, and Sony carry reliable brand names, understand ease-of-use requirements, and have distribution channels, he said.

At the nexus of the consumer electronics-technology convergence sits Cisco, which makes many of the routers, switches, and other Internet protocol networking products that carry Internet content to the home. It should come as no surprise that Cisco Chief Executive Officer John Chambers is a keynote speaker at CES, alongside Howard Stringer, president of Sony Corporation of America.

"Cisco wants people in the entertainment and computing industry to understand that they are the way to get something from point A to point B over the Internet," said Dataquest's Van Baker.

Rumors abound that Cisco will announce it is forming a consumer division that will directly market home products. At least, Cisco is likely to partner with consumer electronics manufacturers for that market, one analyst suggests.

"Sony has the access to the consumer market, not Cisco, so why re-create the wheel when you can partner with consumer electronics makers to reach the consumer?" asks John Armstrong, chief networking analyst with Dataquest.

Other products to watch for at the show include high-definition television sets from Mitsubishi, Samsung, Panasonic and others, although pricing and technical issues mean that the market will take a year or more to advance, Dataquest's Baker said.

Analysts also expect to see MP3-based handheld audio systems, which let users download music files from Web sites and carry them around "Walkman" style. A plethora of digital cameras, computer games that use Surround Sound, smart phones, electronic books, handheld computers, and DVD players are also expected at the show.

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