Insiders: Digital living room still just a dream

By Greg Sandoval
Staff Writer, CNET News.com

Published: December 5, 2005, 2:16 PM PST

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SAN FRANCISCO--Too few consumers are buying into the notion that a "digital home" can improve their lives and the electronics industry has only itself to blame, say executives from electronics firms who spoke at the Digital Living Room conference here on Monday.

Americans have been slow to adopt technologies designed to create a home network that would allow them to download movies off the Internet, access the Web from their video game console or program their digital video recorders remotely from their cell phones.

At a morning panel, industry insiders told a gathering of about 150 people that consumers have yet to see a need for home networks and that the complexity involved in setting one up scares away potential buyers. According to Don Norman, a co-founder of the design-consulting firm Nielsen Norman Group, building a network practically requires the average person to be an IT expert.

"I have a degree from MIT. I'm an engineer and was an executive at Apple," Norman said while discussing his own home network. "And I hired someone to hook it up."

The industry's goal is to give consumers access to their digital photos, games, e-mail, music and video from any device, any time and anywhere. To accomplish this, products must operate with each other easily. But so far, such interoperability is rare.

Apple Computer's iTunes plays on Apple's iPods. Dell's computers work with Dell printers. Sony's products work with other Sony products. But interoperability among products from all three companies can be harder to come by, if it can be accomplished at all.

To illustrate this point, Norman stood behind a PC and displayed the many cables, wires and cords snaking in and around the machine. "We can't even handle the plugs right," said Norman, scoffing at the industry's inability to agree on standards for power cords.

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The reason for the lack of cooperation is money, says Gartner analyst Van Baker, who was also a panel member. Electronics companies are trying to lock consumers into using their proprietary technology so they can charge a premium for their products, he said.

"They want to charge $49.95 for a cable that it costs $2 to make," Baker told the audience.

A standard for power cords is just one of many compatibility issues that electronics makers have sparred over. One of the more high-profile battles is over the technology that will power the next generation of DVD players and discs. Two groups of studios, electronics makers and DVD makers are warring over whether the industry will adopt the HD DVD format or the Blu-ray format.

Baker was skeptical that companies would agree to co-develop standards unless they became convinced that it was the only way to save the market.

"If home networking stays the way it is," Baker said, "we're not going to get above 30 percent penetration."