Network everything. That’s the overall trend in electronic
communications, and it’s going to continue.
“Computers, consumer electronics, and mobile
devices are merging into one always-connected
networked realm, changing the way we communicate, work,
play, and travel by reshaping our relationship with the world
around us,” says Chris Loberg, senior marketing manager
with Tektronix.
We’re gradually making smaller networks of computers
and other devices and subsequently connecting them to
larger networks. And then, we’re making everything available
on the Internet. In fact, it’s becoming difficult to name
something that hasn’t already been networked in some way.
The next big phase will be linking all those smaller networks
together to provide universal access to everything. It
will lead to insane situations, like the need for hack-proof
security for your toaster.
But is networking everything a good idea in the first
place? It’s good for the electronics business, for sure. Most
of these networks add value, provide convenience, and solve
some critical problems. But for the masses, continuous and
ubiquitous communications can be rather annoying—not to
mention addictive.
Additionally, many of those new networks are built just to
get more ads in front of our eyeballs. Google’s open-source
cell-phone idea is great, but do you really want to see all
those ads on your cell phone? It’s probably the only device
you have left that’s ad-free. It won’t be for long, as Microsoft
is already working on such a system, and Google and Yahoo
aren’t far behind.
The Wired World of Broadband
Broadband refers
to the high-speed data connections that provide access to
the Internet and more recently to other digital services like
Voice over Internet Protocol (VoIP) and Internet Protocol
television (IPTV). Cable TV and DSL dominate the broadband
space. Market research firm iSuppli Corp. estimates
that over 40% of U.S. and Japan households have a broadband
connection.
Broadband’s penetration in Europe is even greater, and
by some measures, the U.S. and Japan seriously lag in broadband
deployment. Figures released recently by the Organization
for Economic Cooperation and Development (OECD)
indicate that Japan and the U.S. are 14th and 15th in the
world and well behind most European countries.
Regardless of the number of broadband homes, subscriber
growth is slowing. Both cable TV and DSL subscriptions
are flat, though cable TV is making amazing headway in
signing up its customers for VoIP phone service. Growth is
projected to slow further in the coming year.
One bright spot in the market is the rapid ascension of
fiber to the home (FTTH). Japan and Korea are the main
protagonists behind this growth. However, a significant
segment comprises the new fiber installations by AT&T
and Verizon for their IPTV ventures. FTTH is expected to
continue that growth pattern.
While the broadband sector is flat, the general outlook
for broadband is favorable. The multi-services operators
(MSOs), better known as the cable companies, are expected
to adopt the latest DOCSIS 3.0 standard.
This move will further boost data rates as well as provide
needed management and quality of serice to deal with the
expanding triple play of services (voice, TV, Internet) being
offered. It also will help the MSOs maintain their lead over
DSL providers and over the IPTV services that use fiber.
DSL providers such as AT&T and Verizon continue to
upgrade their DSL lines from plain-old ADSL to ADSL2 and
even VDSL in some areas. Nevertheless, DSL growth will
continue to slow as the carriers inevitably move to fiber to
keep up with the mounting demands of IPTV and the need
for higher speeds.
And don’t forget WiMAX. This wireless broadband technology
will go into full swing this year and it could impact
broadband significantly, especially in areas underserved by
cable and DSL.
Do I Hear $15 Billion?
Keep an eye on the FCC’s spectrum
auction, which will begin this month. The FCC is selling
off 62 MHz of prime spectrum in the 700-MHz region as
it becomes free of UHF TV, which will end on February 17,
2009. This spectrum is expected to be used for cell-phone
service expansion as well as new broadband wireless services
that could include WiMAX.
Google is expected to bid on the part of the spectrum
carrying an open network requirement. AT&T, Verizon, and
other heavyweights are also expected to compete for this
rare and desirable spectrum. The FCC could collect as much
as $15 billion in the process. Watch for the winners.
Predictions
- Cable TV will maintain its broadband lead in the U.S.
- DSL growth will continue to slow.
- Fiber growth will increase.
- WiMAX will be a success in rural areas.
- The shutdown of analog TV on February 17, 2009 will cause a flurry of activity in converter boxes and boost sales of new digital TVs.
- •Google will enter the cell-phone business.