CAZITech ® CONSULTING Market Segments www.cazitech.com CAZITech ® Broadband The term “broadband” implies “fast,” or at least faster than dial-up, but what does it really mean? Broadband lets you do more of the fun stuff, and it's more than just speed. Providers are starting to converge data, entertainment and voice content with services that drive more subscriptions and generate more revenues. As people adopt broadband, they'll next want to share the high-speed connection among other PCs. In other words, where broadband goes, home networks follow. CAZITech ® Data Networks The home networking market is driven mostly by data networks that let several PCs share broadband connections, Internet access, printers, files, and other resources. Most of these networks are based on some form or Ethernet, either over Cat.5 cabling, existing phone lines (HomePNA), power lines (HomePlug), or radio signals (Wi-Fi). But because these data networks generally lack quality of service (QoS) guarantees, they have problems supporting telephony apps with strict latency requirements, or entertainment apps with time dependencies. Voice Networks There's no world standard for cordless phones, so the recent demise of the HomeRF Working Group is disappointing. HomeRF had many technical advantages over Wi-Fi, especially for voice and entertainment apps. It also fit into a vision of next generation phone systems, with the potential of becoming the global cordless phone standard. But HomeRF never got enough market traction to succeed due to the overwhelming success of Wi-Fi, even though Wi-Fi still can't do what HomeRF could. CAZITech ® Entertainment Networks As entertainment goes digital, it brings up new issues, including • • • • • • • Digital Rights Management vs. Fair Use Consumers and Artists vs. Record Label, Set-top Boxes vs. PC Media Servers Broadcast vs. Video-on-Demand Terrestrial Broadcast vs. Cable & Satellite Fee-based vs. Advertising business model Convergence with voice and data According to Allied Business Intelligence, 33.4M STBs were sold in 2002, with nearly 10% having DVR functions. By 2008, they predict that 72.5M STBs will ship, and about 68% will have DVR capabilities. CAZITech ® Control Networks Home automation networks control lighting, appliances, and temperature, with the objective of improving comfort, convenience, and safety, and also lowering utility costs. Industry standards like X-10 make it easy for do-it-yourselfers to install simple control networks. The components they need are available at specialized retailers, online outlets, and even mass market stores like Home Depot. Also, several consumer publications have appeared in the last few years to help the consumer. CAZITech ® Security Networks Whether using wiring or wireless, a security network connects sensors and actuators to a control unit, and possibly from there to a remote monitoring service. Inexpensive CCD and CMOS cameras make surveillance a practical extensions of this network, and the leading security systems can now tie into control and voice networks and even support remote access to these systems. While a wired system is generally cheaper, faster, more reliable, and more secure than wireless networks, but wiring may not be an option. So, wireless lets consumers retrofit existing homes. CAZITech ® Home Wiring Some 42% of new homes already have Structured Wiring, which includes CAT-5e cabling for phones & Ethernet, RG-6 cabling for TV, and a wiring distribution hub. It's not clear, however, that this advanced wiring will outlast a 30-year mortgage, given the pace of technology innovation. This fact, and the large number of older homes, suggests that there will always be a large retrofit market. Wireless (and other no-new-wires) technologies can complement structured wiring. CAZITech ® Wireless As devices get smaller, run on battery power, and move about, wireless networks let them stay connected. But it’s not easy to choose between different standards that include 3G, 802.11b, 802.11a, 802.11g, Bluetooth, Ultrawideband and ZigBee. New multimode, multi-band chip technologies allow new products to sense and adapt to different cellular and wireless LAN networks. >50% of consumers prefer wireless home networks, and residential markets are driving sales of Wi-Fi networks, gaining 55% of the total WLAN market in 2002. CAZITech ® Fiber Optics As fiber cabling extends closer to homes, the legacy copper and coax cabling gets shorter and therefore faster. While we encourage deployment of fiber-to-the-home (FTTH), it’s hard to imagine applications that need that much bandwidth. CAT-5e phone wiring already supports up to 1Gbps, and in a few years, wireless, power line, and phone line networks will reach 100Mbps – enough for future apps that need that speed. So, to prepare for the unimaginable, we simply recommend installing empty conduit between floors in homes, so it’s easier to run whatever new wires are needed later. CAZITech ® Residential Gateways The RG is viewed as a “Holy Grail” for connecting broadband networks to home networks and for delivering a rich mix of services. But because market analysts can't agree on what this device is and what services it enables, their RG market forecasts vary from $3 Billion to $7 Billion in 2007. The original vision of a multi-service gateway that tied in different service providers has been slow to market, due more to political and logistical reasons than technical ones. Instead, companies have introduced other gateway form factors, including standalone service gateways, TV set-top gateways, and PC gateway software.