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Everything but the Kitchen Sink

We have all heard about refrigerators that will order groceries, and stoves that can signal the repair person for maintenance. But when will these so-called "Internet appliances" really be ready for primetime?

July 1, 2001  

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Homeowners are about to embrace Internet appliances; that is the message carried in the latest market research, and in the new-millennium marketing rap from appliance makers. The reality, however, is that the love affair has stalled.

Surveys released in spring 2001 from various research firms reflect an Internet appliance market poised to grow dramatically. Yet, only 150,000 Internet appliances were purchased world-wide last year, according to Gartner Dataquest, Stamford, CT. And that rough reality has driven two of the top three Net appliance suppliers out of the market. So, when will we see “smart appliances” at work in the home? And when will cabling professionals be wiring homes to accommodate them?

Expect a slow burn before the market catches fire. Gartner predicts North Americans will buy 275,000 devices this year. That figure will surge to 20 million Internet appliances sold by 2005, according to high-tech research firm Cahners In-Stat Group of Scottsdale, AZ. Meanwhile, Allied Business Intelligence (ABI), Oyster Bay, NY, predicted in a March report that while the U.S. and Canada will initially lead in smart appliance sales, the two countries will account for only 37 per cent of shipments world-wide by 2006.

For a more accurate market assessment, one need only hit the industry shows — and listen closely, as opposed to simply looking around. One Canadian cabling industry professional, who is well-versed in the residential wiring arena, looked around a recent U.S. appliance trade show and offered this low-key assessment: “These products — microwaves wired to the Web, refrigerators that reorder the milk when the carton runs low — they’re impressive, but I’m betting they’re four, maybe five years, away (from being in homes). It’s a matter of cost, and standards, and consumer awareness. And value,” he said. “What value do these appliances — fridges with sensors — really add? It’s a matter of how much you’re willing to pay. Whether their value is well defined. It’s not yet.”


Defining exactly what smart appliances are can be a tricky exercise. As a general rule, they are identified as non-PC devices that access the Internet either as their primary function, or to enhance their core functions. Internet-enabled appliances can take a variety of shapes, and perform a range of functions; they contain computer chips which make them Internet-enabled, and communicate via the Net through both wireless and wired devices.

By some folks’ definition, Canadians are already embracing these Internet “appliances.” Ask Marc Choma, Director of Communications at the Canadian Wireless Telecommunications Association (CWTA) in Ottawa, about the successful integration of Web appliances, and he’ll point to the proliferation of wireless handheld pagers, Palm pilots and two-way messaging systems. “I’d include in the mix the new digital cell phones, along with the Blackberry two-way messaging device that’s a pager with a full keyboard, which gives you access to full Web service,” he says, adding that — by his definition of Web appliances — Palm, 3Com, Motorola, Nokia have all had success.

But let’s think on a larger, less sexy scale, and include white goods like kitchen

appliances and home infrastructure essentials like air conditioning and heating systems. Home networks with high-speed, always-on Net connections afford the ability to regulate these appliances remotely. And appliance makers such as GE, Sunbeam and Whirlpool have pulled off the drawing board (please see “Homing Devices” sidebar) — and placed on the trade show floor — products which range from refrigerators with wireless pads for downloading recipes, to alarm clocks that turn off the electric blanket.

Worldwide Internet penetration rate, and the frustratingly slow adoption of broadband connectivity service, is having a major impact on homeowners’ interest around Internet-enabled goods such as washing machines and refrigerators.


As for structured cabling finding a permanent market with residential users — and new home buyers in particular — cabling professionals point to increasing consumer demand for a fast, reliable mode of carrying data, video and voice signals as a healthy sign.

Richard Dunfee, training program manager at BICSI, Tampa, FL, knows the fortunes of structured cabling are inextricably linked to new housing starts, and sees a tremendous amount of opportunities opening up for cabling professionals. But he sees problems, too. “New homes are going up, and many electricians are going to have to come up to speed on the new wiring; that’s number one. But even if we train every installer out there, it doesn’t mean anything until new consumers are informed as to what this is all about. And that’s not happening,” says Dunfee. Why? “Builders are providing minimum wiring infrastructures because of the cost factor.” To access the future of high bandwidth services, the proper foundation must be put in homes, but builders are reluctant to go beyond minimum solutions. Structured cabling adds about one per cent to the selling price of a new home, and home builders do not want to spend the extra money on the price of cable or box. (“And realtors, representing builders, are not really that informed as to what’s correct. Plus, many homes that are built that are claiming to have a new wiring scheme in them, but it’s not really there — or it’s being done improperly,” says Dunfee).

Industry observers acknowledge that customers are becoming increasingly more aware of structured cabling and its advantages. “Everybody knows the buzzwords,” says Dunfee, “but (they) don’t really know what they’re asking for. They’re not really aware or informed, and that has to be the first step.” To that end, a manual now being created for BISCI’s new residential program will not only be utilized in the classroom as course work for installers, he says, but will be made available to consumers. “We want them out at the Home Depots, and different areas where consumers shop. Even if we train every installer out there, it doesn’t mean anything until new consumers are informed as to what this is all about.”


Will new-home buyers pay for something they cannot see? The ultimate answer seems to be: they will if they can see its value. And, so far, visions of value have been distinctly clouded.

The result? Netpliance, the Internet appliance company whose i-opener Internet appliance was among the first to hit the scene, exited last year, and 3Com confirmed in April, 2001, that it would pull off the shelves its “Audrey”, television-styled Web connectivity appliances — just months after it had rolled it out. “Audrey was on the market for a few months. We continue to believe in its potential, but we stopped [selling] it because the market will take a lot longer to develop,” 3Com spokesman Bob Ingols said at that time.

Yet, despite such strikeouts, there are strong indicators that manufacturers are not discouraged by the uncertain climate. Most of the players that were in this space a year ago are still in it today, and the number of players and new products is growing. And industry analysts are buoyed by news of two major deals: Intel, in conjunction with AOL, is supplying 250,000 Web-access devices to Spain’s biggest bank, Banco Santander Central Hispano. And National Semiconductor — which makes both chips designed for Internet appliances and an appliance of its own, webPAD — has teamed up with an IT design house to provide affordable Internet-access devices to Brazilian homes and schools.

Such initiatives may keep some companies from getting discouraged, and serve as a catalyst to others looking for deals like those struck up by Intel in Spain, or National in Brazil. While Web-surfing Internet appliances such as Audrey and i-opener have met with little success to date, the reality may be that in order for everyday household white goods to become dependable Internet appliances, manufacturers must focus on less sexy but more practical benefits (for example, home security, customer service
experience, and energy conservation). IBM recently announced a deal with Carrier Corp. in which the air conditioner becomes a node on the Internet. The air conditioner can be remotely managed by the consumer and remotely diagnosed by customer support representatives, eventually leading to cost and energy conservation for both parties.


Everything from your boiler to your front door can be monitored remotely via the Internet. Consider the value of an Internet-based home security system with a subscription-based monitoring service that notifies both the consumer and the proper technicians/authorities when a gas stove is left on — or an uninvited guest is rummaging through your underwear drawer.

And then there is the value found in improved customer service contacts: people living in a smart home could find contacts with manufacturers drastically improved (or at least reduced in number, or more efficient in nature.) When appliances need new filters or are about to require repair, they can become self-diagnostic and “speak-up”. Not sexy stuff, but the value may ring a real bell with homeowners in terms of time and money value.

Some housing developers in the U.S. have started to bundle such services as telephone, Internet, satellite and cable TV to homeowners. Land developers and some service integrators are forming companies to install such services in subdivisions. But it could take two or more years before the confluence of broadband, home networking and Internet appliances really takes off. Can the remaining industry players in the Internet appliance market wait that long?

Poor product designs, high hardware costs and flawed business strategies by vendors have already deterred potential early adopters, according to ABI’s market assessment released in March, 2001. Internet appliances do not yet qualify as products that are material to most company’s earnings or revenue, and do not yet afford companies a firm foothold into a fast-growing market. Which means, in today’s high-tech market, they could get squeezed out pretty quickly.


Standards for these appliances are another stumbling block to market success: many manufacturers are awaiting technical standards for interoperability before venturing into the market. The good news is that a number of international organizations are now working on defining standards for smart appliances. For instance, 13 technology companies have formed an alliance that will let consumers to connect computers and Internet appliances in the home using existing power outlets. Created to set up a technology specification for home powerline networking and to promote its acceptance, The HomePlug Powerline Alliance, San Ramon, CA, hopes to obviate the need for special software and connections currently used to plug into the World Wide Web.

When the HomePlug Powerline Alliance was announced last April, its president, Alberto Mantovani — who is division director of strategic programs for Conexant Systems Inc. — said HomePlug is leveraging the ubiquity of the home power outlet to network an ever increasing number of Internet devices, smart appliances, personal computers and consumer electronics to distribute broadband and multimedia content. ABI predicts wireless networking and networks that use existing powerlines will succeed in the long term.

Officials for Continental Automated Buildings Association (CABA), the Ottawa-based not-for-profit industry association that promotes advanced technologies for the automation of homes and buildings in North America, report that the Association of Home Appliances (AHAM) of Washington, DC — the primary Standards Development Organization for both large and small appliances in North America — began an initiative last year to develop specifications that will facilitate interoperability between devices. In the past, the AHAM has been concerned primarily with performance standards relating to everything from washing machines to popcorn poppers. However, in this era of Internet connectivity and home networks, the organization’s members have also recognized a need for standards for smart, communicating appliances.

The initiative began as a simple request by a few manufacturers for AHAM to investigate the role that it might have in this area. It has developed into an aggressive effort, involving many appliance manufacturers and suppliers — including EmWare General Electric Invensys, Echelon Electrolus Emerson and Whirlpool — to develop messaging standards and communication system specifications. Officials say it will also likely lead to some sort of voluntary certification program, so that retailers and consumers can have an assurance of which products comply with the AHAM standards. The goal? To prescribe the minimum requirements to guarantee interoperability of communication-enabled appliances at the interface between the appliance control and the network/communication system. Three documents developed from this initiative are due for release to the public for draft review during the third quarter of 2001.

Such industry momentum and marketplace initiatives suggest that, while the love affair with Internet appliances now smoulders on a slow burn versus a hot embrace, the foundations for a solid, and lasting, relationship are being laid.CS

JoAnn Napier, a Halifax-based technology writer (and former Globe and Mail columnist), is co-author of the HarperCollins release Technology with Curves: Women Reshaping the Digital Landscape (

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