2 Jul 2010Home networks

1. Overview
2. Key features
3. Marketing
4. Technical requirements
5. Business model and value chain
6. Service listing

1 Overview

Home networks are used to enable people to connect electronic devices within the home or to broadband connections to the internet. There are three broad types of network:

1. Networks for computers and digital phones, often referred to as hubs, enable a broadband connection to be shared between these devices (increasingly via wireless) for internet access, file-sharing, peripheral sharing (e.g wireless printer) voice over IP (VoIP) calls and increasingly IPTV.
2. Networks for home entertainment systems enable somebody to watch a TV programme stored on a personal video recorder (PVR) in another room, for example, or to listen to music stored on a PC in the study on the stereo in the living room.
3. So-called home automation networks can be used to run air conditioning systems, domestic appliances, burglar alarms and similar systems.

Ultimately these three types of network will converge. While this will not be for some time to come, progress is being made towards this goal. The major issue in home networking is that these networks often exist as islands. This is particularly significant for the first two, which make up the overwhelming majority of home networks today. And it is in melding the first two that the main work is being done. An example is France Telecom’s Live Box home hub which gives Internet access, provides VoIP and more than 100 IPTV channels. It works together with the Live Plug HD add-on which allows data and video sharing between devices around the house including TVs and PCs.

The strongest growth to date, has been in broadband hubs, which are integral to the development of digital communication services, namely internet access, IPTV, digital voice and increasingly mobile phone access.

Progress towards a standardised, reasonable-cost home entertainment network has been much slower and more complex, although the development of new standards and protocols is likely to hasten proceedings.

With more and more households wanting to connect multiple devices and share content around the home, the market for home networking has considerable room for growth. From the ISP/telco point of view, home networking provides three key opportunities:

• An effective home network can provide a competitive advantage, and the popularity of home networks, particularly wireless, is growing rapidly.
• A home network provides an effective gateway through which to manage a customer’s services.
• Networks offer the potential for additional revenue from home networking products and services.

Key issues

The rise in digital music and internet video . The past several years have seen large-scale growth in digital music services such as iTunes and podcasting via sites like MySpace and YouTube. This increases the pressure to find solutions for sharing digital media content around the home. More mainstream content is now being broadcast over IPTV and the internet. This is driving a rapid increase in the viewing of content on devices other than the traditional TV. The emergence of smartphones and their thousands of applications, particularly the iPhone and its Android rivals, has seen an exponential growth in viewing content on non-TV devices and the recent introduction of the iPad and a planned host of rival tablet computers will certainly see a further strong burst of growth.

Enabling distribution of real time video content around the home remains the biggest challenge for home networks. High-quality digital content, particularly in HDTV format, requires a robust distribution network. Despite increased bandwidth into consumer households and rapid improvements in techniques such as multi-casting, quality of service (QoS) remains an issue for content broadcast over pure IP, but especially across wireless networks.

Currently, the most common way of distributing video content around the home remains the power line. An ever increasing number of service providers now offer digital and even high-definition (HD) plugs. The launch of Apple TV and the first ‘TV with internet link’ initiatives from the likes of Sony, spurred developments in this area.

Variety of hubs . There is no clear answer to the question of what will be at the hub of tomorrow’s home network. Today, most consumers will have a digital hub (for broadband and phone, plus a set-top box (STB) for digital TV. But customers of major incumbents like BT and France Telecom now have an alternative of bundled services which reduces both hardware (much of which is free) and subscription costs.

In some countries the majority of consumers are also likely to have other devices, such as an Xbox, PlayStation 3, Wii, Apple TV, or Windows Media Centre, and there are a number of additional devices in these categories. Any of these can be used as a hub of sorts to transmit digital entertainment. But despite efforts by PC manufacturers and innovators such as Slingbox, many consumers continue to regard the PC as second best for viewing TV and movies. However this will change with more HD PC monitors coming onto the market all the time, including 27-inch HD monitors which come as part of the single-unit Apple iMac. But the fight to become the main hub will remain a key battleground in the coming years.

Enabling PC content to be viewed on TVs around the hom e. This is a key area for development as more and more consumers want to access internet-type content on larger-screen viewing devices. Google has started to move into this area with its Google TV developments. However, it remains a difficult area to crack, owing to the high quality required for video viewing. Solutions to date have often been complex involving significant amounts of software, but a new spate of standards and technologies such as WirelessUSB, WiGig and Zigbee will start to come to the fore following several years of R&D work which is now translating into products. Regulators are also looking at allowing use of more unlicensed spectrum bands, such as 60 GHz, in addition to 2.4 GHz and 5 GHz which are generally used today.

Prices for network equipment continue to fall. The internet service providers (ISPs) covered by this profile started off by charging often quite substantial fees for home networking product prices but now consumers expect the hardware to be free alongside a bundled offering which costs a standard monthly subscription for a period of one to two years. Many providers are also sweetening the offer by having the first three to sixth months of a contract at a greatly reduced price before the full fee – which is also dropping year to year due to increasing competition – kicks in.

Wireless is becoming more popular and effective. More ISPs are including wireless routers/capability as a matter of course in bundled packages. However most of them come with Ethernet ports giving the option of wired connections which still remains more robust for video transmission and less prone to connection faults.

VoIP is becoming ubiquitous, particularly as a second line . Many service providers now offer digital voice as part of an overall communications package. This includes the incumbent fixed-line operators who are having to adapt to the realities of the digital age and change their business models. Where a home networking gateway is included as part of the package, VoIP capability is built in. Multiple voice lines are an additional selling point for some providers offering home networks.

New profile content

This profile has been updated. Section 3.1 now includes revised market size and revenue figures to end-2009. Section 2.3 contains an update on some of the forums and alliances pushing for standardisation and compatibility in home networking. Section 2.4 provides an update of key player activity, including Apple TV and Slingbox. Section 3.2 details the latest pricing for home networking equipment.

2 Key features

2.1 In-depth example

Someone wanting to network several home PCs now has a relatively easy option in many countries. Telcos and major ISPs offer self-install home network kits. These traditionally came with the equipment to connect one or two PCs via a router to the broadband modem, but are now mostly wireless and allow several PCs to connect to each other, shared peripherals and the Internet.

For wired networks, customers simply have to plug the router into the modem (or use a combined router/modem) and then connect the modem via cables, which plug into the USB or Ethernet port on the PC. If it is a wireless network, no cabling is required, but the PC must have a wireless card and today’s PCs and Laptops come with built-in wireless capability and no external card is needed. If the network is wired, the customer will need to connect each adapter, using either existing wiring or new cables.

The users then need to configure each PC. This is done in two ways:

• Self install kits or ‘installation wizards’ (usually a CD-ROM or a programme downloaded from ISP/supplier website) provide instructions and automatically install the relevant software.
• Manual configuration may be needed if, for example, the person has bought a wireless router that must be added to the network.

PC and Mac users must also ensure that their internet settings are correctly adjusted.

Home networking is not always straightforward in practice, although it becomes more so as time goes on. Different PCs and laptops may have default networking configurations that are not the same. Service providers may use modems from different suppliers in different batches of networking equipment. Drivers may not load. Customers may have forgotten one of the passwords for their DSL or cable account. They may not realise if the router is broken or not working, or a physical connection may be incomplete, for example, between the modem and router. Wireless connections may not establish due to interference within the house.

Any of these things could easily go wrong during the set-up process, so it is not surprising that many users still experience ongoing problems with home networks, despite some big improvements in reliability. A call to the home networking support line is therefore common during an installation. Increasingly, service providers are also using remote diagnostic tools to pinpoint and fix problems remotely, with the call centre operator asking permission to take remote control of a computer attached to the network.

2.2 Customer appeal

For customers with more than one computer in the house, the appeal of a home network is easy to understand.

Customers can share a broadband connection between several different computers. Different family members can surf simultaneously as they please. Wireless bridges and notebook computers mean teleworkers can work online anywhere within the home and even in the garden.

Although not encouraged by service providers who want individuals to pay for their broadband subscription, the sharing of Wifi networks is standard practice for many, since an individual can easily pick up other wireless networks in the area if they are not secured and the PC is correctly configured to select other networks.

Home networks also allow users to share peripheral devices such as printers or scanners between computers.

Content portability is the main appeal of a home entertainment network. People need to be able to move large files between different rooms in the house. For example, an internet music subscriber may want to listen to a music file on the hi-fi in the living room, even though the file is stored on a notebook computer in the study. Or they may want to watch a movie stored on the STB in the living room on a TV in the bedroom.

Enabling the sharing of content around the home has been perhaps the greatest challenge in the area of home networking. The computer and entertainment industries have traditionally been separate, with people using their products in different ways (‘sit forward’ for the computer, ‘sit back’ for the TV). There are both considerable technical and strategic barriers to overcome before the use of proper home entertainment networks becomes ubiquitous.

One trend that has driven the development of home networks has been the mass market uptake of digital music stored on a hard drive or MP3 player/iPod (see the Music Online profile for more information). This is important since it is a fundamental driver for real convergence between computer networks and home entertainment networks. People want to play the music stored on the PC, iPod or other MP3 player on their hi-fi or stereo. In theory this could be achieved via a network, but in practice it is most often done by plugging the music device into a docking station connected to a STB (giving a menu control via the TV screen and remote control), or by plugging the music device into the audio input of a music system (or car stereo).

With HDTV and Blu-Ray becoming rapidly more common, technologies and standards for transferring large amounts of data around the home become necessary. This is what The Wireless Gigabit Alliance has been working on since mid-2009 and in May 2010 it was able to public technical specifications for home networking in the 60 GHz band. The new specification supports data transfer rates of up to 7 Gbps although the high absorbtion of 60 GHz waves means transmission distances are short.

Major vendors such as Samsung, Cisco and Harman International are participants in the group and as a result commercial products can be expected on the market in the coming years.

Products utilising 2.4 GHz and 5 GHz unlicensed spectrum bands are also now starting to find their way onto the market with home networking product vendor Netgear Inc launching a new class of home Wi Fi products at the CeBIT trade show in March 2010. These included a high-performance HD Home Theatre Kit able to wirelessly stream multiple HD videos with no loss of quality throughout a home and an industry-first compact USB powered Universal WiFi Internet Adapter. This wirelessly connects Ethernet-enabled consumer electronics to the Internet.

Netgear also makes a range of digital media players which can be configured with the company’s own HD powerline adapters and wireless broadband router modems for a much more seamless blend of the PC-based and TV/STB based home networks.

The automation network is less common in the average home. This links devices such as heating and air conditioning systems, cookers, fridges and washing machines. The customer appeal is that systems can be monitored and controlled remotely. A family could switch on the cooker via their mobile phone, ensuring the meal is ready when they return home. Householders away on holiday could monitor their burglar alarm from an internet café.

While this sort of application is familiar from ‘home of the future’ prototypes, networked devices remain relatively rare. The exceptions are heating, ventilation and air conditioning (HVAC) systems, burglar alarms and, to a lesser extent, lighting. These systems are often networked in large, high-end North American homes.

The complexity of buying and retrofitting automation networks to an existing house has, until now, been very high.

However the maturing of ZigBee technology will see a new range of inexpensive ZigBee Alliance accredited products coming to the market which will make remote control and monitoring of home security, temperature, lighting and a variety of other sensory network applications affordable to most households.

2.3 Variations

There are many different standards for home networking, using either a wired or a wireless network.

Wired networks

Ethernet

Ethernet is a well-established networking technology. It uses a category 5 (Cat 5) twisted pair cable to connect each PC with a network hub, which connects to the broadband modem. The modem and hub often come as a single device. Modern Ethernet Adapters all support the 100 Mbps Fast Ethernet standard and an increasing number offer Gigabit Ethernet supprt at 1 Gbps. It has a range of up to 200 metres, but it requires cabling to connect each PC and with more demand for wireless, this will turn some consumers off. Wireless Internet bridges convert a wired Ethernet device for use on a wireless computer network. Prices start at about $100.

IEEE 1394 (Firewire, i.LINK, Lynx)

IEEE 1394 was designed to replace the parallel SCSI connection for computer peripherals with a more cost-efficient serial bus interface standard connection bearing many similarities to USB. A network implementation uses a hub and patch cables. A big driver for this technology is digital video. Apple markets the technology under the Firewire brand, Sony under the iLink name and Texas Instruments as Lynx. Users can download video from their digital camcorders for editing or saving onto DVD. IEE 1394 was limited in its first version by a range of only 4.5 metres, although this has been increased to 100 metres.

Although it has taken some time for the standard to get traction, the members of the 1394 Trade Association have high expectations for the standard in 2010 and beyond. The Association predicts continued expansion of what it now generically calls FireWire into higher speed computing, storage and consumer electronics. Texas Instruments says the consumer video market continues to drive demand for content protection-enabled 1394a devices in the high-definition set-top box (STB) and digital TV segments, while the PC and external storage market continue the transition from 1394a to 1394b. With the release to market of low-cost equalizers that can drive 1394b signals up to 100 meters on CAT5, coaxial and plastic optical fiber (POF) cables, Texas Instruments also sees an increased interest in applications like surveillance, machine vision, industrial and medicare.

Less than half way through 2010, computer technology leaders like Hewlett Packard, Dell and Acer have introduced an impressive set of new products with FireWire,

Power cabling

Homes already have wiring to provide electrical power. Home Plug is a consortium launched in late 2001 to develop home networking products based on electrical power cables. Siemens, Phillips, Linksys and Netgear are among the vendors marketing products for HomePlug’s power line solution and the system is getting some coverage in the press. But power line solutions for networking in the local loop have had a bad reputation in the past few years and this is a problem that home power line vendors have yet to overcome. However major telcos such at France Telecom and BT are popularising the technology with their own-branded solutions which come bundled with, or as low cost-add ons, to their home networking/broadband packages.

Telephone cabling

Some homes, especially in North America, have internal telephone wiring between rooms, although this is rare in the rest of the world.

HomePNA (Home Phone Network Alliance) uses phone wiring to create a home network of up to 10Mbit/s. The data is carried by frequencies above those used for ADSL, so the Home PNA network does not interfere with either broadband or the telephone. Users plug each PC into a bridging adapter and connect this to a phone socket. The broadband modem is connected to an internal socket in the same way.

Unlike Ethernet, different applications can be assigned different priorities, for example, giving preference to voice applications. Home PNA is best established in the US where extension sockets are more common. Nevertheless, some European operators, including Belgacom, have also brought solutions to market.

USB

USB (universal serial bus) was designed to connect peripheral devices such as scanners and keyboards to PCs. In a home network setting, the user plugs a network adapter into the USB. This connects to a central hub using a patch cable. Version 1 of USB provides speeds of up to 11Mbit/s, with version 2 offering up to 480Mbit/s.

The advantages of USB are that it is widespread and already used for computer accessories such as digital cameras. The disadvantages are that it has a limited range of around 5 metres and it cannot support a POTS (plain old telephone service) voice line.

Wireless USB

Wireless USB is a short-range, high-bandwidth wireless radio communication protocol based on the WiMedia Alliance’s UltraWideBand (UWB) common radio platform. It is capable of sending 480 Mbps at distances of up to three metres and 110 Mbps at 10 metres.. It differs from conventional Wi-Fi IEEE 802.11 in that it is intended to remove the cables from USB peripherals as opposed to replacing Ethernet cables. Wireless USB is designed to operate in a broad spectrum of frequencies between 3.1 and 10.6 GHz whereas Wi-Fi uses the crowded unlicensed 2.4 GHz and 5 GHz bands.

60 GHz WiGig

The Wireless Gigabit Alliance’s 60 GHz WiGig specification is not meant to be a replacement to current 2.4 GHz and 5 GHz Wi-Fi technologies, but instead to act as a complement that is targeted to devices requiring gigabit speeds, like HD video. While the new spec supports data transfer rates up to 7 Gbps, the high absorption of 60 GHz waves make it suitable only for short-distance communication.

The Wi-Fi Alliance and the WiGig Alliance recently announced they will share technology specs for the development of a new Wi-Fi certification program that includes the 60 GHz WiGig band. This will eventually mean tri-band routers which offer faster speeds, but backward compatibility.

Interoperability initiatives and alliances

There are increasing moves towards greater compatibility between devices, covering both wired and wireless links. There are a number of alliances and initiatives that have developed over the past few years to drive standardisation.

Universal Plug and Play (UPnP) Forum

UPnP is a well-known forum formed in 1999, which defines and publishes UPnP device control protocols built upon open, internet-based communication standards. UPnP has 851 vendor members, with board members including Phillips, Microsoft, Sony, Nokia and Pioneer. The UPnP certification mark is increasingly being shown on vendor websites as a sign of product interoperability and easy installation and configuration. The forum stresses that UPnP technology is independent of any particular operating system, programming language, or network technology.

Digital Living Network Alliance

The Digital Living Network Alliance (DLNA) was formed to develop interoperability between devices. It has 200 members and has certified 1300 products since its launch in 2005. Its certification and logo program now cover four device classes:

• Digital Media Servers.
• Digital Media Players.
• Mobile Digital Media Servers.
• Mobile Digital Media Players.

This industry body promotes interoperability by promoting a minimum set of standards for digital content. A server should be capable of delivering content to multiple display devices and a display device needs to be capable of receiving content from different servers. Devices should support UPnP. IP Ethernet and WiFi using HTTP are the transport methods. JPEG is the standard for still images, with MPEG for video and Linear Pulse Code Modulation (LPCM) for audio. This is the audio standard used for DVD. Additional standards are being added. Recent developments include the addition of mobile devices and printers to its fold, the inclusion of real-time transport protocol (RTP) for streaming audio and video and support for MPEG 4 and Bluetooth.

The DLNA includes major vendors such as Intel, Nokia, Microsoft and Samsung. Standards should be device agnostic, so DLNA does not include WindowsMediaCenter, for example, since it runs on PCs only.

HANA/1394 Trade Association

The High-Definition Audio Video Networking Alliance (HANA) was launched in December 2005 by leading companies from the four industries most affected by the advent of HD – content providers, consumer electronics manufacturers, service providers and IT vendors. HANA worked to create design guidelines for secure high-definition audio-video networks that would speed the creation of new, high quality, easy to use HD products. HANA membership was open to all companies involved in the digital entertainment industry. With HD starting to become ubiquitous HANA adopted the !EEE 1394 interface as its standard connection interface for AV component communication and control and in September 2009 it was dissolved and the 1394 Trade Association assumed control of all HANA-generated intellectual property.

Wireless

Bluetooth

Bluetooth is a wireless networking system developed by mobile phone manufacturers. It uses the 2.4GHz frequency band to transmit in a small cell (a picocell), with a range of around 10 metres. This is sometimes called a personal area network. The first applications were phone-based, including a wireless headset, PDA connectivity and PC-to-phone or PC-to-PDA communication. Bluetooth will allow mobile phones and PDAs to upload and download data and music from a home network.

Bluetooth is limited to seven devices per picocell, which could be a limitation in a home network. It allows speeds of 1Mbit/s asymmetrically or 400kbit/s symmetrically. But Bluetooth has proved to be more difficult to implement across different operating systems than IEE 802 protocols and the cost of devices has therefore remained relatively high. For this reason Bluetooth has not developed as quickly as the IEEE wireless protocols.

IEE 802.11 range: b, g and n

The IEE 802.11 range has proven to be the most successful wireless networking protocol around. It combines a good range, speeds of around 10Mbit/s, low cost and high levels of penetration. It is widely used by companies and 802.11b public network access (WiFi) is available in many urban areas.

Although it can support peer-to-peer networking, 802.11b operates best with a base station. This makes the original installation of an 802.11b network slightly more expensive than other options, but adding future devices to the network is easy. Security is another concern with 802.11b. Its ‘wired equivalent privacy’ protocol does not provide corporate-grade security, and products at the top end of the market are starting to ship with enhanced encryption.

Being wireless means that interference can be a problem with 802.11b. Its range of over 100 metres (up to a few kilometres with directional antenna) means that if several neighbours used the technology simultaneously, performance could degrade.

However, IEE 802.11 has now been refined twice. The first development was 802.11g technology, which offers up to 54Mbit/s and a limited QoS support that is absent in 802.11b. 802.11a again provides up to 54Mbit/s, but with full QoS support that makes it suitable for video. Its range is around 50 metres. The second and most recent development is 802.11n, which was published By the IEEE in October 2009. However Apple made a first move in deploying 802.11n for its Airport Extreme base station in 2007 following a draft of the 802.11n proposal. It claims around five times the speed of 802.11g and around twice the range.

ZigBee

The Zigbee Alliance is a global ecosystem of companies creating wireless solution for use in residential, commercial and industrial applications. Alliance companies work together to enable reliable, cost-effective, low-power, wirelessly networked, monitoring and control products based on an open global standard. The ZigBee Alliance membership comprises technology providers and original equipment manufacturers worldwide.

The goal of the ZigBee Alliance is to provide the consumer with ultimate flexibility, mobility, and ease of use by building wireless intelligence and capabilities into everyday devices. ZigBee technology will be embedded in a wide range of products and applications across consumer, commercial, industrial and government markets worldwide. For the first time, companies will have a standards-based wireless platform optimized for the specialised needs of remote monitoring and control applications, including simplicity, reliability, low-cost and low-power.

ZigBee-compliant products take full advantage of the 1EEE 802.15.4 physical radio standard and operate in unlicensed bands worldwide. Zigbee products typically have a very low duty cycle and so a very long battery life and the ability to remain quiescent for long periods without communication.

X10

X10 is a standard developed in Scotland in 1975 for home automation applications, also known as domotics. It has had most success in the US, although products are available worldwide. It allows up to 256 devices in the home to be networked. They can be controlled via PC or touchpad. It primarily uses power-line wiring for signalling and control but a wireless radio based protocol transport is also defined. X10 devices are typically used for functions such as switching on and off household devices and light dimming.

2.4 Leading examples

Nearly all ISPs now offer home networking, which is increasingly wireless. High-end broadband packages tend to include wireless hubs as a standard component, for which the ISP charges separately (for example, France Telecom and its Live Box or Bell South and its Homenetworking Plus service) or which is included as part of a package (BT and its wireless hub). See section 6.1 for more details.

TV, home networks and internet TV

While the computer home networking market is established and growing, the home entertainment networking market is at an earlier stage of development. However, with revenues from entertainment seen as the big catch in the broadband home for a growing number of companies, nearly all the big names are fighting for a leading position in linking up the TV and other entertainment devices to the home network. A significant consequence of digital music development has been to push Apple into the home networking spotlight. With Apple’s new forays into TV, Apple now poses a threat to others like Microsoft and even Google who are battling for ownership of the digital home.

The fact that most Apple products are fairly close to being genuinely plug and play (at least within the Apple ecosystem) is another factor that gives them a head start in home networking. In these terms, Microsoft is playing catch-up.

However, Apple’s installed base remains far behind that of Microsoft. Despite an upgraded Apple TV 3.0 OS, sales of Apple TVs rose only by 10% in 2009 from the 2.7 million sold in 2008 and 1.6 million in 2007 and as a result Apple dropped the 40GB model and discounted the 160 GB models to just $229. The company also has considerable ground to make up in the TV entertainment market where service providers (broadcasters and increasingly ISPs) and suppliers like Sony and Phillips are far more established. However the iPhone, recent iPods and now the iPad change the dynamics to a large extent. Apple, like Sony, is also now offering all-in-one media centres with 27-inch screens. There are also strong rumours that Apple is planning to launch a new Apple TV at the WWDV trade fair in mid June 2010.

Sony

Sony features in the home entertainment market in more ways than one. It has done well with PlayStation: launching PlayStation 3 (PS3) in November 2006 and selling over 5.5 million units for the year ending March 2007. During the next fiscal year it sold 10.1 million until and followed that with 13 million units in 2009. For the current financial year ending March 31, 2011 it is prediciting sales of 15 million PS3s. Software for the system also performed strongly with 115.6 million units selling in 2009. Its 60GB version of the PS3 has built-in Wifi and both versions have Blue-Ray disc drives for playing games and movie discs. (see gaming profile for more information on the gaming market). As of February 2010 more than 40 million users had also registered for the Play Station Network (PSN), which is an online service providing access to messaging, video chat and online gaming services. (This despite a cumulative total of only 35 million consoles having been sold.

But Sony’s attempts to link internet content with the TV have not enjoyed the same success. The launch of its Sony Internet Video Link for Sony Bravia TV was not warmly received. Video Link is a dedicated box, which attaches to the back of Sony’s Bravia LCD TV sets and connects to the internet via Ethernet.

Sony was criticised for the high price ($299 per unit at launch and now $215) and its limited compatibility (it only works with Sony’s new Bravia models and does not allow open access to the internet. But the company is continuing to add to the portfolio of content available. In addition to Yahoo!, AOL and Sony Pictures, it recently entered into partnerships with CBS and Ford Models.

3G: Motorola, Netgear, Ericsson

A key recent development has been the introduction of 3G into home networks via ‘femtocell’ products. These are plug and play 3G access points that use a household’s broadband connection (as opposed to cellular networks) to transport data.

A number of suppliers are now developing routers with built-in support for VoIP and 3G. They are marketed as having two advantages:

• Enhanced mobile coverage within the home.
• Mobile access to a range of home networking services via 3G handsets.

Netgear launched its first products early in 2008 and Ericsson and Motorola are developing their own products.

Microsoft

Like Apple, Microsoft is making a big play to become the hub of the home for both PC and TV-based services. Its WindowsMediaCenter initially saw steady if not spectacular uptake (it sold 1 million copies in its first two years). The first MediaCenter was a PC running a special MediaCenter version of the Windows XP operating system. It was designed to be the hub of a home network, storing content in many formats and making it available on different playback devices. In January 2007, Microsoft released the generally unpopular Windows Vista, and the Vista edition of the MediaCenter. This is an updated version, which was bundled with Windows Vista Home Premium and Ultimate editions. The major difference was its focus on improved functionality in entertainment capability, such as the ability to record, playback and display TV, movies and music on different devices, especially widescreen TVs and content in HD.

Now all versions of the latest Windows 7 OS come with Media Centre bundled in with a High Definition Multimedia Interface and support for both Blu-Ray. Consumers can use Microsoft’s 360 Media Center Extender to view content in different locations around the home. The latest edition contains built-in synchronization for MP3 players, portable Media Centers, Microsoft has also launched My TVToGO, which is a paid-for service enabling users to transfer recorded TV shows to portable devices.

Microsoft also has Xbox, which can cater for DVD playback with the purchase of a separate DVD Movie Playback Kit. However, it is resolutely marketed at gamers so the Xbox will never become a mainstream home networking hub.

Slingbox

Founded in 2004, Slingbox has enjoyed steady growth since then expanding its footprint around the world. The original company was acquired by Echostar (Slingbox was valued at $380 million). Its technology is a small box priced between $180 and $300 that enables consumers to view their TV programming via the internet on a PC, Mac or portable device. Slingbox works by redirecting a live TV stream via cable, satellite or DVR to another device, such as a laptop or PDA. With a broadband connection, the user can (in Slingbox’s words) ’placeshift’ the stream anywhere in the world. Slingbox sold 100,000 units in its first six months and continues to experience relatively strong sales growth. It has since launched its SlingCatcher, which enables users to watch recorded or internet content on a TV.

Slingbox is likely to feature more strongly in the home entertainment space as more players seek to resolve the issue of viewing internet and TV content on different devices. In 2006, it created the Sling Entertainment Group to develop business models and solutions beyond the Sling ‘box’.

Another key development was the announcement in early 2008 of a CableLabs-certified modem with built-in Slingbox capabilities. Slingbox also trialled services with UPC Netherlands for its customers in September 2007.

Apple TV

Apple launched its long-awaited Apple TV in 2007. The Apple TV is a box that connects to the TV via an HDMI port or component video and audio ports. It wirelessly and automatically synchronises iTunes libraries from any Mac or PC in the house. TV shows, music videos and other rich-media content is transmitted via the hub to the consumer’s widescreen TV (TV has to be enhanced or HD).

Having built a significant user base with iTunes, Apple should have been in a strong position to expand into non-music entertainment and gradually entice users to buy movies and TV shows from its store. The company launched an iTunes movie rental service in January 2008. Movies can be watched on any computer, iPods, iPhone and Apple TV. However, there are conflicting signs and statistics over the size of Apple’s success and ambition in this area. Apple CEO Steve Jobs has described Apple TV as a ‘hobby’ and Apple has not released any recent figures for unit sales. Content is relatively expansive to buy.

Criticisms of Apple TV have included:

• Limited format support. It does not support MPEG 2, WMV or Xvid.
• Limited functionality. Many expect Apple to add additional features to Apple TV, for example, DVR capability and increased connectivity options.

D-Link

In April 2008, D-Link launched a device that enables people to use a TV as their PC display. It initially cost around $240 and has reduced slightly to $230. The PC display output is transmitted over a wireless network to the TV. The system connects using an 802.11g wireless link or a 10/100Mbits/s Ethernet. It is not compatible with DirectX or games/multimedia applications that use Microsoft’s API. Since then it has launched the D-Link DivX Connected HD Media players which allows HD digital content to be streamed from networked PCs to home entertainment systems. The price is $250.