The Emerging Home Gateway Market

Electronic News, May 24, 1999 by Michael Wolf

The first generation of networking equipment for the home that requires no new wiring has arrived, and all indications are that these products are selling well. Products such as those based on the Home Phone Networking Alliance (HPNA) 1.0 standard have met or exceeded unit expectations as they have been implemented by early adopters. With higher speed solutions based on the HPNA 2.0 specification for 10Mbit/sec. networking-over-phone line hitting the market in the fourth quarter, we expect these products will continue to sell briskly.

And this is just the beginning. Connecting PCs with network interface cards (NICs) will always be an exercise that is primarily done within the enterprise, no matter how easy PC and networking OEMs try to make it. However, with the emergence of an entirely new classes of devices that take advantage of new, innovative ways to communicate, the home LAN will quickly mean more than just popping in a couple of NICs.

The most interesting of the emerging class of devices is the home gateway. A home gateway is defined as a device that bridges the home LAN with the WAN, which is in most cases the Internet.

What does the home gateway look like today? In most cases the home gateway is simply a cable modem, an xDSL modem or a set-top box. It can be a dial-up analog modem, but today's top speed analog modems will be left in the dust by broadband access devices, which integrate new and interesting capabilities.

One of the recent market developments that will help to forge this market is broadband chip specialist Broadcom Corp.'s recently announced move to purchase Epigram Inc., the remaining vendor submitting technology for the HPNA 2.0 specification for networking over existing copper wiring at 10Mbit/sec.

The second market development of importance is the recent announcement that networking goliath Cisco Systems Inc. will utilize Sharewave Inc.'s radio frequency (RF) technology as part of its strategy to enable high-speed personal networks in the home.

As part of the joint announcement, Sharewave will develop an Ethernet bridge reference design that will enable a wireless connection to any Ethernet enabled device such as a cable or DSL modem, or even an HPNA phone line NIC with a standard 802.3 PHY, such as those utilizing the Advanced Micro Devices Inc. phoneline controller.

What all this means is that the quickly emerging category of the home gateway is about to get much more interesting. With Broadcom's customers being major set-top box and cable modem manufacturers, it will not be long before we begin to see these devices distribute high- speed Internet access to different places within the home, utilizing in-home copper wiring. These types of products will allow consumers to move Internet access from one PC to another within the home, or beyond the PC altogether.

Not only will the home gateway distribute Internet content around the house, it will in many instances become the master node of the network. In the particular case of the digital set-top box, these types of devices have powerful embedded processors that will be able to handle such functions as e-mail and Web access, packetized voice and automation functions.

While it will be some time before disparate devices throughout the home will be controlled by one device, as silicon becomes further integrated and companies like Cisco move into this market, the home gateway and other networked devices in the home will become more commonplace. HomeLANs, Personal Area Networks, voice-over-Internet Protocol home gateways are on our radar screen today. Maybe someday we'll even be talking about our TANs, or Toaster Area Networks.

Michael Wolf is an industry analyst following the residential networking market for Cahners In-Stat Group, located in Scottsdale, Ariz. He can be reached by e-mail at mwolf@cahners.com