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CES 2003: Home Networking Hits its Stride - InternetNews.
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CES 2003: Home Networking Hits its Stride

As with 2002, "thin" seems to be the watchword for the 2003 International Consumer Electronics Show (CES) slated to kick off in Las Vegas Wednesday, with new liquid crystal display (LCD) televisions and tiny digital cameras, smart phones and wearable devices sure to excite the gadget hounds who flock to the show.

But the technology that may come to characterize the consumer electronics world of 2003 may just be networking, according to Yankee Group analyst Ryan Jones.

"Home networking is going to be huge this year," Jones said.

While technology giants like Microsoft and Cisco , not to mention the late cable broadband behemoth Excite@Home, have pushed home networking technology for years, Jones predicted that 2003 will be the year it comes into its own.

"We reached nearly 16 million broadband households by the end of 2002," Jones said, noting that indicates a ready market for what home networking has to offer. As proof, he pointed to Amazon.com , where wireless gateways were one of the top sellers in electronics over the holiday season. "We're going to see the applications associated with [home networking] really start to take off," he said.

New Players
Along with traditional players in the home networking market like Microsoft, Hewlett-Packard and Texas Instruments , Jones said he expects to see offerings from companies like Sony and Panasonic. Both wired and wireless media gateways, like IP addressable media centers which allow consumers to manage photos, music and video in the living room through their televisions, are likely to be the most watched products in that space. He doubted that the public would see much of the way of Sony's CoCoon-enabled products at the show, but less ambitious devices from Sony and other players are sure to be in evidence.

"There's going to be something this year that is going to be a step to ready American consumers for that kind of technology," Jones said.

CoCoon, which Sony unveiled in September, aims to create "new style of audiovisual entertainment centered on home television" by equipping key gateway devices with large capacity hard disks and broadband connectivity. For instance, a CoCoon-enabled PVR, one of the first products slated for release, will allow the user to set preferences by selecting from 44 keywords, and the device will then be able to access information online and record television programs matching those preferences. Sony said the device will be capable of analyzing previous user choices and items stored on its hard disk to tailor the user profile.

However, Jones said wired networks will be the name of the game for video, at least for now. "Current wireless standards can't really deliver high quality video," he said. "A couple of networking companies will have some preliminary products, but nothing that's really market ready."

To help push acceptance of home networking technology, the Consumer Electronics Association (CEA), which operates CES, has planned a Tech Home -- which will demonstrate the various uses of the technology -- at the show. The Tech Home will show how home networking can play a role in almost every room in the house.

Smart Displays
Tying into the networking craze, Microsoft will push Windows Powered Smart Displays by existing partners -- and it also announced new partners in the form of Samsung Electronics and BenQ, as well as HP, on Tuesday. Smart Displays are essentially wireless touch-screen monitors that consumers can carry with them in the home, allowing them to surf the Web from their couches or check their e-mail while lying in bed.

ViewSonic, the first partner to deliver a product in the U.S., is offering new networking software designed for the Smart Display in the form of its Nevo home control software. Nevo, which it plans to roll out in the second quarter, will allow consumers to use Smart Displays to adjust their stereos, change channels on their televisions, even dim the lights in another room.

"Smart Displays offer consumers a new way to access their Windows XP-based PC from any room in their home," said Bob O'Donnel, research director at International Data Corp. "the new home control functionality announced today enhances the overall appeal for Smart Displays and provides additional capabilities to consumers."

However, Jones was more pessimistic. "The total impact to the industry is pretty minor," he said. "They're still expensive." He also noted that the nascent technology still lacks applications to make the device a must-have.

The Digital Photography Battle
Digital cameras, now well-entrenched with the American consumer will also make a return to the show, this time in even smaller form factors and very aggressively priced. To capitalize on the consumer demand for digital photography, software maker Adobe Systems is moving to extend the reach of its flagship Photoshop software beyond techies and professionals with Photoshop Album, a new product targeting hobbyists.

The new $50 Photoshop Album is built exclusively for Windows-based systems and is widely viewed as Adobe's move to stave off the hard-charging challenge of Microsoft in the digital photography space.

Microsoft's Plus Digital Media Edition, offering similar photo-editing tools to the consumer market was slated for release on Tuesday. The Plus Digital Media Edition, a $29.95 product built for the Windows XP operating systems, hypes its own non-technical tools and toys for editing digital images, video, music and portability.

For its part, Adobe has set up the new software to import digital images into an Album Catalog, allowing non-technical users to organize the images by attaching multiple people, places, events and other tags. A catalog can then be easily indexed by combining tags or selecting a range of time on the timeline created, the company explained.

Photoshop album lets consumers output the images into numerous formats, including online printing, Internet-based photo galleries or online sharing.

With research from Gartner Dataquest showing an estimated 17 percent of U.S. households now own a digital camera, the digital imaging space for hobbyists is ripe for the taking. It is a market also being targeted by Apple's iPhoto suite for Mac users.

At the CES show, Adobe is expected to tout the new software's sophisticated "tagging" system used to organize and find images. Building on top of the popular Photoshop suite, the company has added one-click image enhancement technology for consumers to fix common problems like red-eye, color, contrast and brightness. For advanced editing, Photoshop Album provides single-click integration for users of Adobe Photoshop Elements 2.0.

Additionally, Adobe said Photoshop Album would be the only consumer digital photography product to output in Portable Document Format (PDF) .

Portable Video Players
Some buzz has been generated by the possibility of a first look at a joint product by ReplayTV-maker SONICblue and Intel : a ReplayTV Portable Video Player (PVP) that will allow users to store television programs transferred from ReplayTV, as well as video, audio and photos transferred from a PC, and play the content while on-the-go. First announced in September, the walkman-sized ReplayTV PVP would have a 4-inch screen and a hard drive large enough to store about 10 hours worth of video content.

Other players like France-based Archos (which delivered a PVP with a 1-inch screen last year) are also gunning for the space, and Microsoft may be taking an interest as well.

But Jones has his doubts about this technology as well. "At this point, it's just really not the way that America intakes content," he said, noting that Americans hold that "bigger is better" when it comes to video screens. "There's a lot of drivers around audio. Not so much around video. The screen size, the cost and some of the other limitations associated with PVPs...I think we'll see that remain a niche market throughout this year."

However, there may be more interest around new DVD players with the capability of playing back Internet video file formats, allowing users to burn DVDs from their computers and play them back on their televisions. "We'll see a couple of DVD players that have the capability of playing those file formats back," Jones said. "That's really how we're going to see Internet video move to the TV first."

Smart Phones
While portable video players may have an uphill battle for acceptance, Jones said smart phones, which combine the features of mobile phones and PDAs with high-speed wireless Internet, are likely to catch on this year, especially in the enterprise. Microsoft, Palm, Nokia and Symbian are all competing on the operating system front, and numerous device makers are expected to offer phones at CES, some of them with keyboards, touch-sensitive screens or mini-cameras. Jones is looking for carriers to quickly latch on to these new devices, which will give them the opportunity to push new, revenue-generating services to their customers. Meanwhile, he said enterprises will likely see the advantage in adopting the devices due to the number of productivity applications they enable.

"Productivity applications that are associated with these smart phones are the right first step," he said.

And for those who are on the move but can't stand to be unconnected for long, in-dash telematics and entertainment devices for automobiles will have their presence at the show, from new high-end digital audio receivers to satellite television.