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Connected Homes
December 2006/January 2007 Viewpoints
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Technology Analyst: Michael Gold   Download this Viewpoints

2006: The Year in Review

Because of companies' efforts to improve interoperability, alliance- and standards-development activities dominated the trends in connected-home developments during 2006. In addition, suppliers introduced some key new products and services (notably, movie download-and-burn services, connected robots, and ZigBee wireless sensors), and governments adjusted some regulations in a direction that favors connected-home market developments (notably, facilitating networked medical monitoring at home in the United States and data delivered via electric power lines in Japan). Some expected developments did not occur during 2006, such as the commercialization of ultrawideband technology. But trends during 2006 do provide signals of some likely events that will occur during 2007-notably, Sprint's introduction of WiMax service and Apple's introduction of its Apple-TV platform.

Alliances and Standards Development
  • During March, the Bluetooth SIG (special-interest group) selected the WiMedia Alliance's ultrawideband technology as the basis for a future wireless standard, which the SIG may name Bluetooth 3.0. As a result, the WiMedia Alliance now counts three key market allies: Bluetooth SIG, the 1394 Trade Association (which oversees standards for Firewire), and, most important, the USB Implementer's Forum, whose members have sold literally billions of USB devices to date.
  • During March 2006, the Universal Powerline Association released a specification for home networks based on data transmitted over power cables. Some of the smaller company members announced compliant products, several of which target the Japanese market. (See Market-Enabling Regulatory Developments.)
  • During March 2006, the Digital Living Network Alliance (DLNA) published an expanded set of specifications that aimed at enabling easier interoperability among audiovisual equipment, mobile devices, and printers, including guidance about the use of Wi-Fi Multimedia to improve the smoothness of streaming over IP networks. During October 2006, the DLNA further expanded its specifications to include so-called link protection—a method for deterring unauthorized copying of premium content.
  • During June 2006, several companies announced the formation of the Continua Health Alliance, a group that intends to establish standards for interoperability among personal health-care devices and networks. Founders include Cisco Systems, GE, IBM, Intel, Kaiser Permanente, Medtronic, Matsushita (Panasonic), Motorola, Philips, Samsung, Sharp, Welch Allyn, and Tunstall. The alliance intends to devote its initial efforts to telehealth solutions that aim at serving people with chronic, long-term disease as well as the elderly.
  • During July 2006, the IEEE 802.11n Task Group voted to approve draft specifications for the technology that will enable the next-generation of Wi-Fi. Users can expect usable data rates to surpass 100 Mbit/s, with some vendors claiming that performance will surpass 200 Mbit/s. The 802.11 Working Group expects to vote to approve a final specification during January 2008. But vendors, who are already selling "pre-n" hardware, expect that any changes from the current version of the specifications will be minor and implementable by means of a firmware upgrade.
  • During July 2006, the UPnP Forum (which maintains the Universal Plug and Play standards) issued updated specifications that help audio-video devices discover each other's presence and identify available content residing on home networks. The new specifications reportedly help users record programs for later viewing without interfering with digital-rights–management measures for deterring copying. Source devices can include optical-disc players, PCs, digital-video recorders, personal-music players, set-top boxes, and so on. Destination devices can include PCs, TVs, digital-media adapters, stereos, and personal-music players.
  • During October 2006, the WirelessHD Interest Group announced that its members would jointly develop the WiHD specification for wireless interconnection among entertainment electronics. LG Electronics, Matsushita Electric Industrial Company (Panasonic), NEC, Samsung Electronics, SiBeam, Sony, and Toshiba expect to complete the WiHD specification during spring 2007. Developers claim that WiHD will use smart antennas to support non-line-of-sight transmission of uncompressed high-definition video using unlicensed millimeter-wave frequencies near 60 GHz. The developers will presumably support the encryption technologies that major film and TV studios insist on as a precondition for distributing popular content via digital home networks.
  • Throughout 2006, the High Definition Audio Video Alliance (HANA) demonstrated its approach to high-definition networking, including transfer of video from a set-top box to any display in any room of a household. Formed during late 2005, HANA currently requires use of Firewire, but member companies are considering other physical interconnections, including wireless ones.
Product and Service Introductions
  • During March 2006, Sling Media introduced software that enables Internet-connected, Microsoft-compatible handheld devices to display video that streams from home set-top boxes, disc players, video recorders, and PCs. Formerly, such "place-shifting" software worked mainly with Wi-Fi–connected notebook computers or, in some cases, with Sony-branded devices only. The new software makes it easier for users on the road to enjoy content that resides in the home.
  • During July 2006, CinemaNow introduced a download-and-burn service. The service enables users to buy movies and to burn DVD discs at home legally. CinemaNow sells such movies with permission from major studios, including MGM, Sony Pictures, and Universal Studios.
  • During October and November 2006, South Korean companies and government projects delivered limited numbers of connected robots for home use. These robots have synergy with connected homes because they are not fully autonomous. Instead, they can learn new functions via PC or Wi-Fi interfaces to the Internet. So far, these robots lack a killer application. For example, they do not yet appear capable of learning to feed a pet or fetch a beer from a refrigerator. In fact, some advertised functions appear to be unhelpful, such as ordering take-out food or controlling a TV—functions for which mechatronics serve no purpose and add unnecessary cost. Nevertheless, the ability to learn new functions constitutes a radically different approach to robots (indeed to non-PC devices in general) that has the potential to drive South Korea toward leadership in home robotics.
  • During November 2006, the first ZigBee-compatible products, including wireless sensors, came to market. The ZigBee specification enables small, low-power wireless devices with long battery life but supports limited data rates, typically under 250 kbit/s. All the newly released products are geared toward OEMs, developers, or value-added resellers (they are not retail products for consumer use).
Market-Enabling Regulatory Developments
  • During June 2006, U.S. regulators simplified the rules governing insurance reimbursements for patients who receive home-monitoring equipment for managing heart disease. The new rules will greatly help market development for health applications of home networking. The new rules contributed to market growth in this sector, which I estimate surpassed 200 000 U.S. households using networked home-medical-monitoring equipment.
  • During November 2006, the Japanese government approved specifications for data delivery via powerlines. The technology can support transfers of audio and video from one point in a household to another. The technology may also be appropriate for linking street-level fiber infrastructure to nearby homes.
What Did Not Happen During 2006
  • U.S. broadcasters did not cease analog broadcasting. An old roadmap for digital television called for analog broadcasts to cease during 2006. Even as late as 2004, some people were still predicting that all U.S. television broadcasts would be digital by now. For more than five years, SRI Consulting Business Intelligence analysts have consistently reported that this change would not occur by 2006. What did occur during 2006: During February, President Bush signed into law a requirement that TV broadcasters must end analog broadcasts on 17 February 2009. The law also budgets a $1.5 billion subsidy to help U.S. residents purchase digital converter boxes for their existing analog-TV tuners.
  • Ultrawideband technology did not arrive in retail markets in significant quantities during 2006. During January, the IEEE 802.15.3a Task Group disbanded. Many engineers believe that Freescale Semiconductor and its original parent, Motorola, improperly interfered with the committee's voting process, an event that undermined the effectiveness of the IEEE process and the reputation of the IEEE. Also during January, Belkin demonstrated a wireless interface for USB ports based on Freescale chips. But during March, Freescale quit the industry alliance that it founded (the UWB Forum). And during September, Belkin announced that it would use the industry-leading WiMedia technology rather than that of Freescale. During November 2006, Freescale shareholders approved a $17.6 billion buyout offer by private-equity investors. The buyout leaves room for doubt whether Freescale will ever commercialize its UWB technology in mass-production quantities. Meanwhile, developers made excellent progress on such Wimedia-based ultrawideband technologies as Wireless USB. But the confusion that resulted from the futile Freescale-versus-WiMedia controversy likely delayed market development, which is finally set to make measurable progress during 2007, dominated by WiMedia-compatible products.

Look for These Developments in 2007
  • The year 2007 will see many middle-income households adopt 32-inch and larger flat-panel displays. Consumers will make these purchases for a variety of reasons: in part because price wars will make these devices more affordable, in part because features and benefits (especially space-saving features of flat panels) will be enticing, and in part because of status-concious motivations to "keep up with the neighbors." Also during 2007 many young people will find that front-projection units become both affordable and necessary, in part because of the ease of portability that's consistent with their mobile lifestyles and the need for a platform that plays key roles not only in entertainment, but in study groups and employment.
  • Regrettably, however, interest in displays threatens to distract customers of all ages and income levels from more advanced home-networking applications. As a result, the outlook remains mediocre for home-automation and energy-management applications, despite concerns about energy costs. Among nonentertainment applications of connected homes, look for productivity and home-security applications to lead the market, ahead of amenities, networked home health care, advanced climate control, and advanced robotics.
  • Wireless USB technology will emerge in retail products during 2007 and will be the first instance of ultrawideband technology in mass markets. The WiMedia technology appears set to dominate the ultrawideband market (as opposed to proposed technologies from Freescale, Pulse~Link, and so on). Early adopters will enjoy new flexibility in home-office design, placing printers, scanners, and other peripherals (possibly including flat-panel computer displays) where appropriate, instead of where cables can reach. Analysts expect that most new computers and handheld devices (such as cell phones, MP3 players, and thumb-drive memory devices) will not incorporate Wireless USB as a standard feature during 2007. But a key area to monitor will be whether 2007 will see R&D groups prepare to integrate Wireless USB into a variety of products during 2008 and subsequently, or whether suppliers will signal that Wireless USB will primarily serve as an optional user upgrade to conventional, wired USB ports.
  • Despite the niche-size markets for energy management and networked home health care, look for increased partnering activity between small, innovative companies and larger ones active in these domains, as well as large-company acquisitions of small companies. For example, perhaps Royal Philips Electronics will partner with or acquire an SME to accelerate its market-development process. Such SMEs include Card Guard, Health Hero Networks, and Tunstall. And perhaps a leading electrical-equipment supplier will partner with or acquire one of the smaller companies that has been leading the way in providing equipment for grid-connected alternative-energy solutions. Leading small-companies active in such grid-tied systems include Xantrex/Trace Engineering and Outback Power.
  • Watch for the Apple TV platform to emerge during the first half of 2007. During September 2006, Apple demonstrated a $299 set-top box that will route video from existing home computers to big-screen TV sets, which will also provide a non-PC-based user interface for the popular iTunes Music Store. The demonstration unit included onboard component video, HDMI, and optical audio outputs and used 3-D graphics hardware to enhance the user interface. Apple appears very confident that Apple TV will be a success, as evidenced by the fact that the company preannounced the product well in advance of its scheduled Q1 2007 release. (Apple normally announces new products only when they are ready for users to order and has on occasion even filed lawsuits against individuals who leaked advance information about upcoming products.)
  • Watch for Sprint to introduce WiMax service in the United States by the end of 2007, after investing some $1 billion in the technology during the coming year. It has not yet announced price and performance, but the value proposition is likely to provide service superior to that of current mobile-data offerings at a comparable price. Sprint will likely advertise data rates of at least several megabits per second with rate plans as low as $60/month. Higher data rates may be available at higher prices. In fact, given that Sprint controls more than 100 MHz of spectrum in many U.S. markets, bursts of data at hundreds of megabits per second are technically feasible. However, Sprint will face challenges in providing wide-scale coverage in the United States, and readers can expect that coverage will be limited until 2008.
  • Because of the release of OEM-level ZigBee products in 2006, readers can expect retail ZigBee products to emerge during 2007. Early product entries may include wireless security sensors, smoke alarms, and thermostats. Early products are likely to emphasize office and commercial applications, but some ZigBee vendors will likely target residences, especially apartment houses.
  • Watch for robot developers in Japan to change strategy toward connected robots, as their South Korean colleagues have done. Possibly, Japanese robotics developers will aim to surpass not just match South Korean efforts by making it easy for third-party developers to take advantage of software, hardware, and network interfaces.