New Report: How Ethernet is Transforming CEDIA

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This past year has seen a surge in interest in the use of Ethernet in advanced Digital Homes designed by Electronic Systems Contractors. This situation is quite a change from just a few years ago when most systems were based on proprietary communication systems.

Advanced Digital Homes can have over a million dollars of electronics in them. These homes let the homeowner control their home theater, every television, whole-home audio system, all of the lighting, drapes, heating, alarms, cameras, gates and more from one wireless touchpad. The Electronic Systems Contractor (ESC) that designed, installed and supports the electronics in these homes is usually a member of the Custom Electronic Design and Installation Association, or CEDIA.

A new report from DIGDIA explains how the ESC is starting to embrace the use of Ethernet networking in their Digital Home designs. Years ago these designs were based on linking all of the electronic devices in the home with proprietary communication systems. This approach meant that systems were less flexible and more difficult to maintain. By using Ethernet networking to link these devices together, modern Digital Homes are moving to a new level of flexibility and capability.

For example, in the past it when something stopped working the ESC would get a call from the homeowner. The ESC might try to solve the problem over the phone, but often times they'd have to schedule a service call. This meant the homeowner would have to sit around and wait for the ESC to show up.

Now the ESC could be sitting in a coffee shop, pull out their laptop and diagnose and fix the problem using a web browser. The homeowner gets the problem solved without having to wait around and the ESC doesn't have to rush across town to fix something. At the end of the day, the homeowner views this type of service as more valuable than a home visit by the ESC. So, even though the ESC didn't have to work as hard, they can actually charge a premium for this type of service!

Installation and configuration is likewise easier when everything is connected by Ethernet. Instead of thick bundles of dedicated cabling for every kind of function, one CAT5e type cable might do the trick. Changes are also potentially easier to make.

The average consumer, even the tech-geek, might be wondering about now - haven't Ethernet-based gadgets that claim to automate all kinds of things in the home been a general failure? Retailers have seen high return rates, sometimes over 50%, of such products because the consumer either couldn't get it to work or the product didn't work as claimed. There have been a few successful products, to be sure, but the past years have produced a graveyard of failed products from some very big names.

So, how is it that these ESCs are embracing Ethernet? The differences are in the devices and the installation. The devices that go into these advanced Digital Homes are generally not bought at the local big box retail store. These devices are designed for the CEDIA market and have price tags that would make the average consumer blush. For example, a device that can hold all of your DVD movies and play them anywhere in your home might cost more than $25,000. But, the designers of these devices have also made sure that they are very easy to use.

To make these systems easy to use requires the second difference - the ESC. These people spend hours to customize the user interface to each individual homeowner's situation. Touch screens don't have generic labels; instead they show a diagram of the home's layout with graphical symbols for everything. Despite the complexity, the average homeowner rarely needs more than a half hour of instruction on how to use everything.

The market for all this is currently fairly young and selected, but prices are beginning to drop. Sometime in the next decade many of these devices will be more common place in more average consumer's homes, much like the PC with broadband service is now more the rule than the exception. Maybe you, too will have an advanced Digital Home, too.

About DIGDIA
DIGDIA helps companies find growth opportunities, create winning strategies and business plans in the digital entertainment value chain. A free excerpt of the report CAT5 Transforms CEDIA is available. Services include strategic consulting and market analysis with an understanding of the industry value chain and technology. Reports on Digital Cinema, Digital Cable, IPTV, Digital Home, and Consumer Electronics and other topics may be found at http://www.digdia.com.

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Gary Sasaki
DIGDIA
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