The $4 billion new home market
could be yours by 2008

Not just for the rich anymore, home automation -- combining media and entertainment with communications and smart appliances -- is nearly ready for a wider market of upper middle-class households.
     So says ABI Research in The US Digital Home Enterprise:  Connected Home Automation.
     The biggest, most measurable boost follows commitments to home automation by some of the world's biggest technology firms -- individually and as members of standards-setting groups, writes ABI Senior Analyst Erik Michielsen.
     A key roadblock to home automation was a lack of integration between systems but in recent months digital media adapters have come to market giving IP-connectivity to a number of devices, ABI reports.
     Depending on who's talking, the central control hub or gateway is to be PC-based or the TV box connected to cable or satellite TV.
     Microsoft and HP teamed to create the Windows Home Concept suite perhaps based on Motorola's Home Media Architecture (for entertainment).
     As Michielsen sees it the smart home starts with media, entertainment and communications but will migrate to the entire home as wireless technologies develop with radio standards they use -- Wi-Fi, Bluetooth, Ultra Wide
Band and ZigBee.
     Standards are needed, he added, to get a diverse collection of devices talking to each other.
     The OSGi (Open Services Gateway Initiative) Alliance is guiding development of gateways, noted Michielsen.
     The ZigBee Alliance includes appliance makers eyeing the benefits of machine-to-machine communication, he added.
     Complex new systems need installation and maintenance so that brings the Computing Technology Industry Assn into the picture for training and
certification under its "HTI+" (Home Technology Integration) initiative.
     Michielsen analyzes trends in depth and gives detailed forecasts for the sectors and profiles of all the major players in what's likely to become a huge market.
     Samsung, Honeywell, Sears and Whirlpool are expected to join the push to expand products and services if customers demand them.
     The report predicts the "in-home controls" market in the US will hit $4 billion by 2008 and US-based networked home control revenues will approach nearly $900 million.
     About 20 million residential gateways are expected to be shipped to US homes in that year closely tracking broadband deployment.
     Proliferation of internet-ready devices leads ABI to expect the PC to play a major role as an internet gateway but it could be overshadowed by dedicated home control gateways that create a more seamless system.
     An unresolved question: The computer will hold an advantage with its computing power and traditionally accepted and demanded applications, Michielsen forecasts, but it's yet to be seen whether "service providers will push their own gateways at lower prices" in an effort to sell complementary services to the PC at a much lower price.
     Gateways will offer bundled, whole-house systems hooked up to HVAC, security, lighting, consumer electronics, PCs and other connected appliances.
     "Home control companies are expanding beyond their traditional core market to add features and systems to provide a bundled package for the homeowner," said ABI.
     Interest in home control systems will be "closely correlated" with the presence of other data and entertainment networks and consumer electronics in the home.
     Radio-based networking firm Zensys is working with chip-maker Intel to create affordable, low-power wireless connectivity with automation systems.
     Linksys, a leading network hardware maker, and home electronics firm I-Cube offer digital media adapters to connect gaming, photos and music across the home, said the report.
     The Zigbee Alliance had a strong showing at January's Consumer Electronics Show, wrote Michielsen, and its big-name members have shown a commitment to the smart home.
     Members include Mitsubishi, Philips, Motorola, Samsung and Honeywell -- plus industrial leaders such as ABB, HP, OKI, Siemens, Texas Instruments and Eaton.
     "What's happening to the home now happened to the enterprise in the '90s," Michielsen added.
     Supply chain management, enterprise resource planning and customer relationship management were big initiatives that cut costs, created efficiencies, drove revenue for service providers and cut customer costs, he added.
     "The home isn't that different" (www.abiresearch.com).

     (Story originally published in Restructuring Today 6/7/04)