What Steve Sees on Tech's Horizon

Watch for the rise of home networking, PC and Net entertainment systems, and broadband

The year now ending is one a lot of people, especially in the high-tech industry, will be happy to put behind them. But while the economy remains shaky and many segments of the industry are reeling, there are a number of reasons to look forward to a brighter 2002.

One reason for my optimism is that coming months are likely to see some of the important trends that have been building for years finally come to pass. The most important of these in personal technology are the convergence of computers and entertainment and the growth of truly useful wireless data networks.

Few notions have spawned as much silliness, or wasted as much money, as convergence. After all the hype, it turns out that people don't want to surf the Web on TV sets or watch movies on their PCs. And TV viewers remain couch potatoes, with little desire to interact with what they see on the screen. Instead, convergence is sneaking up on us from another direction: the delivery of Internet content to audio and video systems in a networked home.

This trend is still in its very early stages, and high prices and complexity will scare off all but early adopters for a while. But the pieces are falling into place for a mass market explosion. The first is home networking, especially wireless Ethernet. In the past year, the cost of wireless networking has been cut by half with the introduction of $200 combination gateways and base stations from companies such as Linksys, 2Wire, and Netgear. If only setting up a network were as simple as it is cheap. Despite a lot of progress, much remains to be done to make the technology accessible. I also see a huge business opportunity for service providers that can install and manage home networks.

The next step is attaching entertainment systems to these networks. This is beginning to happen. Hewlett-Packard (HWP ), Compaq Computer (CPQ ), SONICblue (SBLU ), and Kenwood all make units that link audio systems to music available on PCs or the Internet. You can use your computer or dedicated equipment to select from a display of title and track information on prerecorded audio CDs and DVDs. These will be among the most interesting products of 2002, and I will be writing about them in coming weeks and months.

Entertainment over the Internet requires high-speed connections--and will give many consumers a reason to want broadband. It's been a dreadful year for the broadband industry, with DSL phone service, particularly, in a shambles. But cable companies have gotten much better at deploying broadband quickly and cheaply, with many consumers able to install service themselves. Even the collapse of cable Internet service provider Excite@Home looks more like a bump in the road than a disaster, as cable companies learn to run their own networks.

The advance of wireless data will also be a big deal in 2002. Wireless local area networks really took off in 2001 in businesses, campuses, and homes. In the coming year, wireless data will move beyond the LAN. By midyear, AT&T (T ), Cingular, Sprint PCS (PCS ), Verizon (VZ ), and VoiceStream plan to offer data service at 40 to 60 kilobits per second in major cities across the U.S. Similar data networks are popping up in Europe and Asia.

Because of display and data-entry limitations, high-speed data is of little use on a phone. Instead, all sorts of new devices will take advantage of the networks. PC Cards for laptops will be first, followed by add-ons for Palms and Pocket PCs, and finally, integrated wireless handhelds--a course similar to that followed by wireless LANs. Bluetooth, a long-delayed short-range wireless technology, will begin to allow laptops and handhelds to connect without cables to phones that can then link to the data network.

Of course, many of the trends we saw in 2001 will continue. Computer price declines will slow, but that trend remains inexorably downward. And following the great dot-com shakeout, serious business people are focusing on online businesses that can provide value to their customers and profits to their owners.

This has been a trying year in many ways for all of us. With a little luck, the year to come will be a much better one. I thank you for your readership, and share the hope that 2002 will be a year of health, prosperity, and peace.


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