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1999: The year for home networking?

The home networking niche has been the subject of much interest, as industry leaders say PCs will be more effective connected to each other and a network.

Industry studies point to a huge market for it. Technology companies are falling over themselves to be a part of it. Participants on the show floor at the Comdex industry trade show this week were buzzing about it.

But when will the market for technology to connect PCs and devices within residential homes take off?

See special report: 
When worlds collideThe home networking niche has been the subject of much interest for some time. Various analyst firms peg the number of homes with more than one PC at about 20 million, an indicator in some people's minds that eventually those PCs will be more effective connected to each other and a network.

The industry believes there is a market to connect PCs, maybe televisions, and other future devices like Net surfing terminals, within a home. Those connections could share a common printer, for example, or utilize a common high-speed link to the outside world, like a cable connection or a digital subscriber line (DSL).

A recently organized standards effort should help things along, according to some, while others point to movement in the broadband access market as another positive indicator.

"We've got a fairly significant number of multiple PC households," said Kevin Hause, an analyst with market researcher International Data Corporation. "There is a market out there for networking in the home.

It's definitely a long-term play," Hause continued. "While certainly there's some real opportunity in 1999, in terms of a mass market, we're talking years."

Several recent moves indicate the nascent market to connect PCs and devices within homes may be finding some traction:

  • Start-up Epigram, a player that makes technology to enable third parties to build home networking products that take advantage of phone lines, announced that networking giant 3Com will make an equity investment in the firm. The company also showcased new technology, scheduled to roll out in the first quarter of next year, that partners Texas Instruments and Netgear--the low-end arm of Nortel Networks--plan to roll into products by the second half of next year.

  • Another phone line-based firm, Tut Systems, recently inked a technology licensing deal with networking giant Lucent Technologies as well as with chip giants Intel and National Semiconductor.

  • And on the wireless side, Proxim showed off devices made by a slew of partners at Comdex this week while another firm, ShareWave, announced its first deal with a third party to build wireless devices based on its technology for the home, with Philips Electronics.

    "We think there is a latent demand that is reasonable," said a cautiously optimistic Tony Zuccarino, vice president of marketing for Epigram.

    Another executive, ShareWave's chief Jim Schraith, said this year's Comdex essentially served as a "coming out" party for a market that should hit its stride in the next two years. Schraith also noted that the niche is sure to have enough room for a wireless option.

    With results of these various partnerships generally scheduled to hit the market next year, most believe the remaining issues facing the home networking market come down to pricing and making the technology easy to use. "We're now starting to see companies overcome this," noted Hause. "Really, they are just coming to fruition."