What’s in store for 2004

Plenty of choices as first-generation technologies firm up and enter the mainstream

At the Digital Domicile , major trends come in threes. Here’s a recap of the major events that shaped the home network market in 2003 and predictions of what’s to come. 

• Real products ship . After years of big talk and false starts, the first wave of honest-to-goodness home network entertainment gadgets and gear became available. Big name consumer electronics players such as Sony, as well as SOHO networking vendors (Linksys, D-Link and Netgear), began offering personal video recorders, media adapters and home network servers, and D-Link surprised the market with its cool i2Eye VideoPhone — all at pretty reasonable prices.

• Network gaming took off . Sony and Microsoft put their game consoles online, and Nokia embedded a wireless connection into its N-Gage handhelds, the new gaming platform/phone combo wireless companies hope will catch on with the twenty- and thirty-something set.

• Home networking grew up . Cisco’s acquisition of Linksys and Netgear’s successful IPO proved the home network industry had made the big time. 

In 2004, three new trends will emerge. 

• Products ship in real volume. Sure real products shipped in 2003, but not all that many. In 2004, we’ll see strong growth. In-Stat/MDR expects entertainment network connections to double from 2003 to 2004, and to reach 22 million by 2005. 2005 will see close to 40 million worldwide connections, propelled in part by the expected release of Microsoft’s networked Media Center .

• Gateways become big. Though it’s not the first time we’ve predicted the year of the broadband gateway, 2004 looks promising. 2Wire shipped more than a quarter-million DSL gateways in third quarter of 2003 alone. With component costs dropping, gateways today cost what modems did just a couple of years ago. That means vendors such as 2Wire, Netopia, Netgear and Linksys can offer service providers gateways at prices they can finally swallow — and offer to you as part of a broadband home network service bundle.

• Voice over IP takes off. Sure VoIP’s been around for years. But you know something’s up when Tom Brokaw talks about it on the evening news. IP telephony service provider Vonage continues to sign up consumers in droves and just introduced a low-cost package for about $15 per month. Incumbent carriers are scrambling to offer services, too. Most cable MSOs have offered circuit-switched service, but Cox and Time Warner Cable are now moving to VoIP. And since broadband VoIP requires a router and a network phone adapter, it’s driving the home network market. This year, we’ll see the first 802.11b/g cordless handsets with VoIP intelligence for the consumer market, too.