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Tech giants, retailers team on home networking

A coalition formed by Cisco Systems, Best Buy, Sun Microsystems and others aims to market to consumers the benefits of connecting their computers and electronic devices to the Net.

A dozen tech giants and retailers are expected to announce Wednesday an alliance to advocate what has long been touted as the next big thing: home networking technology.

Gartner Dataquest analyst Todd Hanson says the future of home networking technology is in the white-gloved hands of Mickey Mouse and other icons of the entertainment world.

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The coalition, formed by Cisco Systems, Best Buy, General Motors, Panasonic, Sun Microsystems and others, aims to market to consumers the benefits of connecting their computers and electronic devices to the Net. The group, to be called the Internet Home Alliance, is an important step as technology companies try to jumpstart an industry they have touted for years, sources said.

With high-speed Net connections becoming more widespread, technology companies believe consumers want all their electronic devices--PCs, stereos, kitchen appliances and security systems--to communicate and share a Net connection. That way, homeowners can adjust the heat or air-conditioning in a room from a PC, watch a security-camera feed of their home over a Web browser, or distribute audio or video throughout the home.

A spokeswoman for the alliance's organizers declined to comment Monday. But the coalition is expected to include a mix of retail stores and technology and consumer electronics companies. Other founding members include Sears Roebuck, CompUSA, 3Com, Motorola, Honeywell, NewPower and Invensys, sources said. Member companies have pledged a financial commitment to the effort, a source said.

The alliance's goal is to serve as an umbrella organization for home networking, teaching consumers the benefits of the technology, sources said.

"They want to convince consumers this stuff isn't scary," one source said. "They want to tell consumers what you can do with this stuff, what works together, what doesn't."

The Internet Home Alliance's plans include marketing efforts, such as brochures and advertising, as well as the possible creation of a certification program, in which products in the future will have a "seal of approval" sticker from the alliance.

With the effort, the coalition hopes to propel a market that is expected to grow from revenue of $600 million this year to more than $5.7 billion by 2004, according to research firm Cahners In-Stat Group.

In the past, marketing and advertising efforts for home networking products were done by individual companies, such as 3Com or Intel, or by industry consortiums that handled a specific home networking technology.

For example, the Home Phoneline Networking Alliance has created a high-speed standard that lets people network PCs together by plugging them into regular phone jacks.

On the wireless front, two separate efforts--Wi-Fi and HomeRF--allow consumers to network their PCs wirelessly. Another coalition of companies is building a new standard that allows people to connect their electronic devices through electrical outlets in the home.

Various companies are using the standards to create individual home networking products for consumers. For example, S3, which markets the Diamond Rio portable MP3 player, sells a device that streams digital music from the PC to stereo speakers throughout a house using existing phone lines. 3Com, Intel and others have created networking kits using the various standards that allow people to network their PCs to share Net access, files, and computer peripherals such as printers.

And technology giants such as Cisco Systems, 3Com and Motorola, as well as start-ups such as 2Wire, are combining all the standards together to create new home appliances, called "residential gateways," that allow consumers to connect electronic devices, such as PCs and appliances, with their phone service and high-speed Net access.

"This alliance is a marketing and educational thing," one source said. "In the past, it's been individual companies or technical standards groups pushing it, but there's been nothing like this--a broad spectrum of companies along the whole chain, presenting a united front to talk the talk."

The coalition doesn't include service providers such as AT&T, America Online or Qwest, but organizers are talking to them and inviting them to join, sources say. Service providers can help drive adoption of home networking because they can install the technology the same time they connect homes with cable, phone or high-speed Net access.

The new home networking alliance also does not include Microsoft, a big rival of Sun Microsystems. Both companies have competing strategies for home networking and are involved in a lawsuit over the Java programming language.

Even though it doesn't build home networking technology, General Motors is a member of the group because it plans to build cars with Net access. "It's not just home networking, but about the Internet lifestyle," one source said about the coalition.