A Year Ago: Stumbling into the digital living room

First published: Tue, 22 Jun 1999 08:39:26 GMT
Written by Robert Lemos, Contributor

But when it comes to information-age appliances, many of today's big players may not make the cut

Analysts speaking at the Digital Livingroom conference in the US identified several companies that are not taking the right steps to become successful in the home -- among them, Compaq, Sun Microsystems, and Kodak. "I don't think any of these companies are going out of business," said Ross Rubin, vice president of media watcher Jupiter Communications. "But Compaq right now can't expand its influence in the home because it is making up ground and realising it bit off more than it can chew with the purchase of Tandem and Digital."

The firms with the best chance at having a presence in the digital living room: Sony, AT&T, Intel and Federal Express, said the three-person panel. Panellists made few explanatory comments between the lightening blitz of ratings.

Microsoft got mixed marks. "They have the software and some content," said Rubin, "but they need access to the consumer." Companies weren't the only targets of the analysts' scepticism. Technologies also came under heavy scrutiny.

Fong pooh-poohed the home-networking movement, reflecting that consumers' homes are far too complex to simply install a network. "Home networking is a joke," he said. "It is a tough nut to crack. There are just a lot of landmines out there." Rubin disagreed, predicting that home networking just needed an extra push such as the popularisation of broadband Internet access.

Yet, he warned companies, broadband technologies will never transform the Internet into the most obvious pre-existing model: TV. "Companies are going to be sorely, sorely disappointed if they think they are going to turn the Internet into television," he said. For many companies, providing broadband access to the average home has so far proved an insurmountable hurdle. US Telecommunications provider US West may be farthest along in its roll out, said Sol Trujillo, US West's chairman and chief executive. The Baby Bell serves only 10 percent of the population in 14 Midwest and Pacific states. Subscribers to its digital subscriber line technology account for 50 percent of all DSL users.

For all its success, however, the company has had to undergo massive perceptual changes to keep up. "Shift does happen," Trujillo joked, during a 30-minute keynote. Over the next four years, US West's dominance may change, said Ross Rubin, who expects 20 percent of homes in the US to be wired for broadband by the year 2003.

Sprint announced on Monday an aggressive move to stay in the game. The long-distance carrier will bring broadband to the home in three cities -- Seattle, Denver, and Kansas City -- for $100 to $150 for full services, including Internet, up to local four phone lines, and thousands of minutes of free domestic long distance.

But without a radical spur, the broadband roll-out will be slow, said the panellists. Rubin joked that he had a solution. "How do you solve the broadband problem?" he asked. "Take all the lawyers that work for the phone companies and put them to work installing DSL modems. That would solve the broadband problem.

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