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The March 25, 2004 Issue Provided by System Dynamics Inc.
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EH Expo Revisited -- A Parallel Universe?

The growth of broadband connections to the home and home networking, plus the increasing popularity of home theaters and surround sound, provide a great opportunity for people to help consumers plan, install and maintain all this equipment and the services it enables. The EH Expo show is targeted at "connected home professionals" which includes A/V contractors, computer systems integrators and VARs, homebuilders, electrical contractors, security system installers, etc.

We last visited EH Expo two years ago, and we decided to revisit this show and see how the industry had changed. We were particularly interested in the impact that the increasing intersection of the PC and consumer electronics worlds had created for this industry.

EHX show floor --> Click for larger pictureAlthough we found some changes in the types of equipment being shown and discussed, overall we felt like we were visiting a parallel universe where all the changes we've seen in the past two years had not happened. While the conference organizers and some of the speakers were well aware of the dynamic changes coming from digital convergence, the preponderance of equipment being demonstrated was still based on closed, proprietary systems with perhaps a few weak bridges to the digital/IP world.

We thought by now it would be a "no-brainer" for homebuilders to include structured wiring to many places in the home to accommodate consumers' increasing dependence on connected digital devices. CEA had released its "TechHome Rating System" prior to EHX two years ago, and a few vendors were talking about it then.

At this year's show, our discussions with vendors and knowledgeable attendees indicated that the industry has made surprisingly little progress in convincing builders that electronic home technologies are not just an expense to be minimized, but rather an opportunity for upselling and increased profits. If the value proposition is unclear to consumers, realtors, builders and integrators, it's hard to fault most vendors for focusing on "traditional" technologies.

Despite this rather glum overview, we found some "points of light" at the show and are hopeful for the future.


"Technology in Master-Planned Communities"

The "Builder Bull Session" on "Technology in Master-Planned Communities" was very helpful. Brian Hills, Vice President, Technical Services of The Broadband Group (TBG) chaired the session and talked about the work his company is doing in helping developers plan the technologies for master-planned communities. He showed an outline of a "technology master plan" with four components:

  • a physical network providing the community infrastructure, often "fiber-rich"
  • prewiring guidelines for structured wiring in all residential and commercial construction
  • relationships with one or more telecommunications service providers for video, high-speed internet access and telephony
  • a community network providing an "Intranet" to serve the entire community

Brian said that it was important for developers to "make technology an amenity from day one" just like tennis courts and swimming pools.

Newland Communities

Don Whyte spoke in the session. Don is president of the Southeast division of Newland Communities, one of the largest US developers of master-planned communities. Newland is a client of TBG and has been following the "master plan" approach in its FishHawk Ranch development near Tampa, Florida.

Don said Newland's mission is to "create wonderful places to live" and that "technology creates an amenity to distinguish our new neighborhoods." Every builder in their community is required to install structured wiring. Newland inspects the homes to verify that the wiring meets the specifications--so the customer has the new services the day the family moves into the house. He said "the community intranet is as much an amenity as the parks and the playgrounds."

In an interview after the session, Don told us that he plans to start building "technology information centers" to demonstrate these new technologies to homebuyers. This would bring together builders and technology providers in a stand-alone building away from model homes and the current design centers. It would focus on technology and provide hands-on demonstrations. The first of these will be in operation later this year.

( www.broadbandgroup.com ) ( www.newlandcommunities.com )


Structured Wiring Companies

At the show, we talked with several companies that specialize in structured wiring systems; these companies provide the wiring infrastructure that goes into the walls of new homes being built. They are extending their product lines beyond wiring to include more elements of the networking system, and to develop new ways to help builders and installers sell their products to homebuyers.

Leviton

We were delighted to compare notes with Bobby Riesdorph of Leviton whom we first met two years ago. He confirmed our perception that little had changed in what builders were typically doing with structured wiring, repeating what he told us in 2002: the vast majority of homes equipped with structured wiring still have only one CAT5E for telephony and one RG-6 for video, even though it would cost less than $100 to add a second CAT5E for data.

In November, Leviton and Dedicated Devices (DDI) announced a "partnership to introduce a new class of device which will transform ordinary structured wiring and data networks into fully-capable internet protocol (IP) Structured Media networks." In the Leviton booth, Jonathan Weech of DDI showed us a prototype of their new product -- a small server mounted in the wiring enclosure. They said they would be able to discuss specific features and functions later in the year.

OnQ Home

OnQ Technologies recently launched a new initiative called OnQ Home a "new branding identity and sales methodology" that is focused on solutions for builders, installers and consumers. At their booth at EHX, Loren Mitchell, Director of Business Development, showed us their new configurator. This has a "Chinese menu" of networked applications and services--the customer selects from a set of columns and OnQ's system tells them the installed price. The installer will set up the configurator with the products and prices appropriate to the specific market.

OnQ is about to launch a major campaign to help builders and installers use this simplified approach to selling the connected infrastructure and the applications it enables. The OnQ Home web site promises that it "will launch in April 2004" so it should be running soon after you receive this.

( www.leviton.com ) ( www.dedicateddev.com ) ( www.onqtech.com ) ( www.onqhome.com )


Netstreams - IP-based Audio and Video

The Netstreams booth was one of the most exciting at EHX - perhaps because it came closest to our view of the evolution of this industry. We were attracted to the booth by a sign for the DiGiLinX distributed audio system. After a demonstration, we observed that it appeared quite similar to a product GE SMART showed us two years ago. We soon learned that Mike Braithwaite--who showed it to us then--is now CTO of Netstreams and indeed we were seeing the latest evolution of that product.

After the show, we interviewed Herman Cardenas, CEO of Netstreams (and formerly CEO of GE SMART). Herman has been working on networked audio and video for a very long time, and we were glad to talk with him about his plans.

DiGiLinX is a "whole home" audio system based on TCP/IP, Category 5 wiring and Ethernet (plus any other technology that can interface with Ethernet, such as Wi-Fi). It is a complete system solution integrating IP-based loudspeakers, audio sources (both "legacy" devices like CD players and emerging "native" devices like home media servers), "metadata" (see the Get Digital article below) and Web-browser-based control screens.

Each room in the house has a DiGiLinX module connected to (or integrated into) the loudspeakers; the module acts as a web server, a controller and amplifier for the loudspeakers, and an analog input for audio devices in that room. A user can address any module (such as "Living Room"), select any content from any source, and direct it to any room or combination of rooms.

The system is designed initially for the demanding "custom" market where audiophiles can hear the difference between compressed audio (like MP3) and uncompressed CD audio. So the system is designed to handle multiple streams of uncompressed PCM audio as well as MP3, and transport them to any combinations of rooms. Herman told us one major problem Netstreams has solved is synchronizing the room modules: an album selected to play on speakers in many rooms will have no audible time difference between rooms, even though each module is playing the content individually.

Although Netstreams will offer several control devices, including wall-mounted and portable LCD controllers, the system can be controlled from any Web browser. So any PC, PDA or Smart Display in the house can be used to control any room's speakers and all sources.

Netstreams has ambitious plans to extend the system for video, and to move into broader markets. Herman said the first audio products will ship in July. We're looking forward to learning more about Netstreams products through a test in our home.

( www.netstreams.com )


D&H Distributing

As we were getting ready to leave the show, we noticed a booth for D&H Distributing, a large distributor of home technologies. In their booth, we found demonstrations of several products that fit well in the networked home:

  • OmniFi showed two digital audio devices: the DMS1 WiFi Home Digital Media Streamer, an audio digital media adapter that streams music stored on PC hard drives to the home entertainment center; and the DMP1 Digital Media Player, which installs in the family car and plays through the existing car audio system. (OmniFi recently shipped both devices to us for a test, and we're looking forward to installing the DMP1 in our car.)
  • Sandy holding Creative Zen Portable Media Center --> Click for larger pictureCreative showed its upcoming Creative Zen Portable Media Center, a little device that stores music, video and pictures on a hard drive and plays them on a built-in LCD screen. it also showed Sound Blaster® Wireless Music, their new audio DMA that plays MP3 and WMA audio files over existing 802.11g (or 11b) Wi-Fi networks. It has a nice remote control with a built-in LCD screen, so you can select the album or genre of your choice directly on the remote (rather than on the front panel of the device or on a TV screen, as with some other DMA products).
  • Dave with Intel Entertainment PC --> Click for larger pictureIntel showed an example of the Entertainment PC Paul Otellini talked about at CES two months ago. This sleek box with embedded PC functionality would look good in the entertainment center.

We asked a representative of D&H why they were showing these products at the show, since most other companies were showing much more traditional products. He explained that D&H--unlike most distributors--carries computers, networking and audio/video product lines, and has found that their reseller customers are increasingly combining these products to build integrated systems for end users. D&H now characterizes itself as "a one-stop resource for ... these converging technologies". Glad to see it.

( www.dandh.com ) ( www.omnifimedia.com ) ( www.intel.com ) ( www.creative.com )