The CES Hangover

Did you go to CES?  It was wild. Even though we think tradeshows are from satan, this one was worth all the trouble.

One of the coolest things at the show (that provided a glimpse into how things will profoundly change) was the introduction of the NETGEAR/Skype phone. Even though this is a Wi-Fi-only phone (for now), dual-network handsets (that simultaneously support cellular and Wi-Fi technologies) are coming fast and furious from companies like Motorola and Nokia. Here's why they're cool.

So you’re driving home while on your cell phone. You pull into the garage and the cell phone detects your Wi-Fi signal. It makes a connection over your home Wi-Fi network (read “free phone call”) while your still on the cellular network. Once connected, it splices the call from the cellular network to your home Wi-Fi network that ultimately connects to the Internet through your broadband IP connection.  And it does all this without anyone knowing.  That’s going to happen a lot sooner than you think. The point(s) is that these phones accomplish three things:

1. give consumers a more flexible and cost effective way to use the phone (there will essentially be no need for cordless phones anymore)
2. let broadband carriers to steal cellular minutes and cellular money from the cellular phone companies
3. make reliable Wi-Fi in the home a “strategic imperative”

Problem is, your home Wi-Fi network will need to be as dependable as the cellular network run by carriers (smart Wi-Fi is designed for this purpose). Today’s home networking technology basically blows (14 year old offspring slang for "operates very poorly") for dependably carrying all this new digital multimedia content.

Not surprising, the BIG TREND that seemed to drive most of the interest at CES was the collision of IP networks and consumer electronics. CE companies clearly understand that that all the digital multimedia information going into and coming out of their boxes will be wrapped in IP. From Bang & Olufsen to Sony, Motorola to Philips, IP connectivity has taken center stage.

The problem is, these boxes don't speak IP too well. And even if they have an Ethernet jack on the back (most now come with one but don't tell you how to use it...click on picture), consumers must plug an Ethernet cable into it.  Now just try getting an Ethernet cable (or any other cable) to it.

But make no mistake, the "digital home" is real - whether you want it or not. Despite being an amorphous term made up by committee of creatives, the digital home is causing opportunities and problems for everyone in and out of the value chain.

Consumers now have a ton more services, information and products that make things better for them.  Meanwhile providers have new ways to make more money.  Everyone’s happy right?  Wrong. Today’s consumers don’t have a home network that can reliably support all this new content and all these new services. 

The pre-CES New York Times article said it best: <snip> "Getting consumers past the confusion of how to link, say, a PC to a TV will be the next big hurdle" <snip>

We agree.