SAN JOSE, Calif. As if the economic recession wasn't enough, carriers are seeing a broad slowdown in communications services that is expected to put pressure on digital consumer hardware. The good news is there's an emerging opportunity supporting the growing number of devices in the digital home, said an industry analyst.
Growth is down significantly across the board in areas including broadband services, wired and wireless voice lines and cable TV in North America, according to International Data Corp. "We are anticipating market saturation," said Matt Davis, a program director at IDC.
The number of new users signing on to broadband services in the U.S. in 2008 was 5.5 million down from ten million in past years. Similarly about one million new users signed up for cable TV, down from 2.5 million.
Meanwhile, growth in wireless voice service has slowed to 1.4 percent a year, and the number of homes without wired phone service is skyrocketing to more than 25 percent as they opt for cellular-only plans.
"Some carriers shed a million [wired phone] lines a quarter last year," said Davis. "We are in a situation of a very steep meltdown, and this puts massive pressure on hardware," he added.
In search of new growth areas, IDC surveyed users about some 30 new service concepts. Users showed strongest interest in networked services such as remote control for lights and heating/air conditioning and integrated voice mail.
"Consumers are ready for connectivity and integration, so there's an opportunity" said Davis. "We think a home integration function needs to emerge in the market place, and this area has the legs to grow up to a half billion dollars in the next few years," he added.
But consumer electronics companies and network operators need to work together to enable these new businesses, primarily by setting standards that let carriers access devices in the home. Today service providers use standards such as TR-069 to access gateways, but they typically cannot reach out to systems beyond the gateway, Davis said.
Several groups are involved in related work. The TM Forum formed a working group in June 2008 to look at how to remotely manage devices over a network. The Universal Plug and Play Forum sets standards for how to discover and interoperate with devices locally on a home network. The Digital Living Network Alliance has issued interoperability guidelines based in part on the UPnP work.
Separately, Davis said the Broadband Forum is reaching out to CE companies to establish interoperability standards.
"It's really fragmented right now and no one is putting it all together," Davis said.
"It's been a slow go and until the coming storm [around market saturation] fully hits, I don't think the will is strong enough to bring people to the table," he said. "Vendors will coalesce and move toward the money when it is clearly there, but in the meantime we think the service provider may have to force the issue and create the market," he added.