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Digital Lifestyle: I'm linked in, now what?

Twice in my career, dating back as long ago as 1988, I enthusiastically embraced the idea that personal computing had become a lifestyle and joined teams to create magazines to examine and celebrate that life. Both times, we were - at best - well ahead of our time.

Now, many years later, I'm getting very excited about the converging computer and consumer electronics market, the emerging digital lifestyle. This time, though, the market conditions are fundamentally different from any we've seen in the 20-plus years of personal computing. This time, the digital lifestyle is blossoming by its own accord, driven (as it should be) by consumer behavior and not by technologists' wild ideas.

What's different today?

Some 100 million consumers have purchased computers. Broadband adoption continues to grow, and consumers are installing wired and wireless networks in their homes. By 2008, 75 percent of U.S. households will have at least one PC with entertainment functionality, according to Parks Associates, a Dallas-based research firm. The research firm estimates that over the next four years, broadband Internet will reach 60 million homes and that half of those households will have a data network.

In short, consumers are adopting a digital lifestyle all on their own, and doing so despite the complexity and cost of today's converged computing/communications/entertainment products. Recently, Intel Capital hosted a Digital Home Industry Forum in Redwood City, California, to talk about its vision of the digital home. In explaining why Intel is investing so heavily in the convergence arena (Intel put $200 million into its Digital Home Fund), Intel Capital President John Miner argued that the "transformation from analog to digital is more dramatic than the transformation from minicomputers to PCs."
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If he's correct - and I believe he is - the resulting value creation that lies ahead will far surpass that of the PC revolution, which began 20 years ago.

Still, I have to wonder if Intel has a vision that maps well to consumer experience, or if it is more top-down technology development that misses the mark. (Perhaps my worry is fueled by the Forum's staging, which looked a lot like the digital home mockup Intel used at DEMO 98, when Intel shared what even it admits was a flawed vision of the digital home.)

Louis Burns, Intel's vice president and general manager for the Desktop Platforms Group, shared Intel's view of a digital home that enabled access to "any content, on any device, from anywhere." After tailing consumers around the world, Intel focused on three functional applications: entertainment, learning, and communications. To illustrate these, Intel produced videos showing happy people enjoying faintly futuristic applications.

But unlike past concept videos where smart refrigerators do the family grocery shopping, these new concepts focus on applications people really want - first-run movies in the home, simple video conferencing, home tutoring over broadband networks.

In each scenario, Burns says, the technology must meet three criteria. It has to be "dirt simple," it has to be wireless, and it has to be high fidelity. In Intel parlance, wireless means WiFi and high fidelity means premium audio and video content. Those are the easy criteria to meet; dirt simple computing is the challenge and the one area where Intel is "spending a lot of our investment."

Intel's so-called Kessler platform is the cornerstone of that investment. Burns believes this system will "replace the traditional AV stack in the home today," in effect acting as the hub of the digital media experience.

Based in practical applications driven by consumer desire, Intel's vision may at last be in sync with that of end customers. Yet while Intel invests millions to create an "eco-system" around the digital home, consumers will be the final arbiter of the digital lifestyle. And that's exactly what makes this emerging market so interesting and so risky.

The consumer market is driven almost by definition by fad and fashion. There will be a tremendous amount of experimentation with new components and approaches. Mountains of money will be spent on pioneering digital lifestyle concepts and companies, money that will not necessarily translate into commercial success. That success will be determined by fickle consumers, which makes me wonder if Intel's prediction of selling "tens of millions" of entertainment PCs (EPCs) across the next three years isn't overly optimistic.

The road to the digital lifestyle future will be littered with products and companies that don't survive this period of experimentation. Major computer and consumer brands today may not make the turn in this accelerating new market, just as major brands failed in the turn from mini- to PC computing. New companies - ones we've not yet heard about - will be the established leaders in five years' time. Brands like Sony and Apple will seal their fate, either as visionaries of the digital age or almost-were players who missed the opportunity.

For all the new devices, heart-thumping content, and stunning ideas, perhaps it's this battle of the pioneers that is the best reason this next wave is going to be a very exciting ride.

End notes

Spam is conquering a new frontier - instant messaging. According to the Radicati Group, this newer form of spam, also known as "spim," is set to triple from 400 million to 1.2 billion messages this year. Radicati says this burst in action is due to the increased use of instant messaging by businesses. The firm says email spam will hit 35 billion messages in 2004 . . . As researchers are starting to see a slowdown in the growth rate of broadband subscriptions, President Bush is calling for universal and affordable access for everyone, IDG News Service reports. He is also calling on lawmakers to not overtax broadband access and stifle innovation. In fact, Bush is supporting a proposed Internet tax ban . . . Mirra, Inc. has gathered up $8 million in Series B Funding. The company, which created the Mirra Personal Server, is being backed by a band of investors led by Sequoia Capital. Venture Strategy Partners and Sunrise Capital were already onboard. Mirra Personal Server, aimed at consumers and small office/home office users, features digital content protection and management with continuous backup, secure remote access and over-the-Internet sharing.

Save the date: DEMOmobile 2004

Where is the mobile marketplace going? What new opportunities will the next wave of "device computing" bring? How will "always on" people interact in a world that is seamlessly and wirelessly connected? Join the industry thought leaders at the forefront of this dynamic and innovative technology market segment. Be a part of DEMOmobile 2004.

DEMOmobile 2004 September 8-10, 2004 Hilton La Jolla Torrey Pines, La Jolla, CA http://www.idgexecforums.com/demomobile/

___________
Chris Shipley is the executive producer of NetworkWorld's DEMO Conferences, Editor of DEMOletter and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com. Shipley, has covered the personal technology business since 1984 and is regarded as one of the top analysts covering the technology industry today. Shipley has worked as a writer and editor for variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine and Working Woman. She has written two books on communications and Internet technology, has won numerous awards for journalistic excellence, and was named the #1 newsletter editor by Marketing Computers for two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.

This column was reprinted with permission of Network World Inc. All registered trademarks are owned by IDG. More information can be found at http://www.idgef.com.

© IDG. All rights Reserved

***** The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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