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Commentary: Cisco positioning on home networking

Cisco and other networking players must establish business and product development relationships with consumer electronics makers because those companies understand the consumer market.

By Todd Hanson and Brian Riggs, Gartner Analysts

With Cisco Systems' push to build network infrastructure into new houses, home networking technology will become almost transparent to consumers--as it should be.

Gartner expects 6 million households with built-in network infrastructure by 2002.

See news story:
Cisco to wire homes with networking technology
Home networking products are getting easier to set up, configure and maintain; however, building a home network is still a complicated prospect for most consumers.

In home networking, a fine line exists between what is technically feasible and what people really want to do with technology. Although a video conferencing system that lets family members in different rooms talk to each other is relatively easy to build, it represents a mere novelty, as do other applications such as a refrigerator that updates grocery lists.

Gartner believes that the most attractive (and lucrative) home networking applications will focus on entertainment. To deliver a new generation of entertainment applications to consumers, Cisco and other networking players must establish business and product development relationships with consumer electronics partners because those companies really understand the consumer market.

Cisco has proposed a $15,000 to $100,000 premium for a customized home network. Most consumers, however, will find that cost to be a bitter pill to swallow. The monthly cost for services will make the cost issue even worse. Moreover, such a high cost could significantly limit the number of prospective buyers if the first owner puts the house up for sale.

Lastly, Cisco must provide an upgrade migration path for those installations so consumers will not be left with thousands of dollars of outdated infrastructure equipment that provides only yesterday's service capabilities.

(For related commentary on creating a home network for PCs, see registration required.)

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.