As computing and consumer electronic worlds collide, resellers have a role to play in hooking up the digital home. From online gaming consoles to large screen projectors for home theatre use, the PC and its associated devices are becoming the entertainment hub of the living room.
“The vision is to have IT products in the lounge room,” said Eugene Wong, marketing manager of distributor Lako Pacific, which has its strength in peddling digital video products. “And the fight is on to own that space.”
Several categories of peripherals catered to the digital home, Tech Pacific’s systems and peripherals category manager, Josh Velling, said.
“We see it as: gaming — software, hardware and peripherals (joysticks and game pads); notebooks with an integrated computing and A/V design (products with wide-format screens); music and peripherals (digital cameras and MP3 players); networking, which is the broadband to the home and the wireless technology that connects the devices; then the actual equipment including plasma/LCD TVs, traditional VCRs, DVD players and projectors along with the imaging category of media centres.”
And there’s no shortage of players catering to the space. Quick to the gate, Intel is cranking up the heat and striking alliances with LG Electronics and Shanda Networking in an effort to connect devices in the digital home.
Gearing up for the digital home, Intel plans to take the PC to the next level by offering a trio of Intel chipsets (including the 915G/P and 925X Express chipsets), several Intel Pentium 4 processors that support hyper-threading technology, and advanced sights and sounds on the PC, which is upgraded with High Definition Audio. Meanwhile, the Digital Living Network Alliance — with members including Microsoft, Sony and Intel — is working to standardise the communication between devices. Indeed, the overall goal is to help consumers better enjoy digital music, photos, videos and games on PCs and other devices in and around the home.
The digital home market for hardware devices is the next haven of growth in Australia, according to IDC.
“Hot items include digital media adapters, LCD TVs, notebooks and desktops with an OS that’s designed for the digital home, routers, digital set-top boxes, projectors and digital cameras,” IDC analyst, Michael Sager, said.
Additionally, all eyes were on the release of the MediaCentre PC (the upcoming Microsoft OS) — set for an October launch in Australia — which would rev up the space, Sager said.
On the projector front, HP was offering resellers a mix of business and consumer categories, as well as hybrid models that supported digital light processing technology, which enabled the company to deliver a higher contrast ratio, HP product manager for projectors, Ben Ho, said.
Consumers were craving a large screen experience, Ho said, among other characteristics including ease of use and installation, along with value for money.
Today, users can get great picture and sound (which comes via DVDs and set-top boxes), but the devices lack true connectivity. Wireless technology — including media adapters — will help cut the cords, he said.
“If you look at how we connect the devices today, that’s where the problem lies,” Ho said. “We have a power cord for every single device we connect, and each product has one device connected to another to allow it to talk. Each one of those devices would have a separate remote control. So it’s remote control hell.”
In the future, devices would become much more integrated — so say goodbye to the army of remote controls littering the lounge, he said.
“Are we going to have a multitude of remote controls for every device we have in the home or are we looking at something logical to control all of those devices in one system? For example, a PC with a TV tuner card, with a DVD player with a hard drive to allow you to capture some images, and a wireless keyboard and mouse to control that PC — and that’s definitely the way of the future.”
HP’s digital home push involves offering a trio of functionality including visual, sound and integration capabilities (providing an all-in-one device that plays the content, uses one power cord and offers one remote control).
Ho expected to see a host of this type of product from HP at Christmas time.
Epson is also pitching projectors as part of its digital convergence push.
The technology most suited to reseller and channel activity on digital convergence were the EMP-S1 and the EMP-830/835, Epson marketing manager, Mike Pleasants, said.
The 835, for example, is wireless enabled (802.11 g/b), making it cable-free.
“It can also be PC-free because it can run presentations, slideshows, and movies directly from USB memory devices such as cards and memory sticks, including digital and video cameras,” he said.
The product launch fitted under the 3i strategy, Pleasants said, which included imaging on paper (developments in printers and other imaging products), imaging on screen (developments in projectors), and imaging on glass (developments in mobile displays).
Lako Pacific, meanwhile, is also cranking out digital home products, Wong said, and was taking advantage of the push towards IT/CE convergence.
The Pinnacle ShowCenter had been launched as part of its IT multimedia lineup.
The ShowCenter was well suited to the convergence trend, Wong said, given it was a blended IT and CE product.
“This is a media client that allows you to access multimedia files on the PC, but you don’t necessarily have to sit in front of the computer,” he said. “You can access a lot of the files [including music] and navigate, sort and play through a remote control in front of the TV in the lounge room.”
The company has also rolled out digital TV tuners in a bid to address the trend towards all things digital (including digital video and stills).
“You can watch digital TV on your PC, and also record digital TV on the PC so you can put it on DVD and basically use it like a VCR,” Wong said.
So how can resellers prepare for the shift and are they even ready to take on the digital home front?
Wong said while resellers were still behind the eight ball, the company was on a mission to educate the channel through road shows and seminars, chatting up convergence.
“For the last five years we’ve been trying to educate the resellers that there’s going to be a shift,” Wong said. “The channel has been very slow on the uptake,” he said. “It takes a while for resellers to get the concept. It’s quite a challenge for a reseller to pass on this visual experience to a consumer in the shop and not have it running.”
On the mass merchant front, Wong also finds it challenging determining who takes responsibility for the different product categories.
“There tends to be a clear definition in the company structure: There is a department that sells video cameras, DVD players and then one that sells IT products,” he said. “Any of the retailers are so clear cut that when a product of such a nature like ShowCentre comes along, where does it fit in?”
HP’s Ho agreed, claiming the traditional audio visual products — sold by the audio/visual (AV) resellers — were integrating more and more IT related features, blurring the traditional product lines.
“This puts both the AV and IT resellers in a bit of a situation because anyone of them will have a product in front of them and there will be aspects of that product they’re not comfortable with,” he said.
AV players, for example, are comfortable with the installation aspect of the job, but not the network management services typically the expertise of an IT reseller.
“The AV reseller can have the projector ceiling mounted to the roof and run a cable, and that’s not a problem, but then if you want the projector to be network-managed, you want to control the projector with the PC or PDA, and want to be able to use USB [upgrade some firmware], that’s a problem,” Ho said.
In an effort to help bridge the gap, HP is working through Tech Pacific (particularly with the projector line) on the education front to bring resellers up to speed. Tech Pacific’s Velling said the company had a history of supporting SOHO and business (with a range of IT products), and the same strategy would be applied to help resellers go after the consumer market.
“Resellers have huge business opportunities here as they may already be servicing a customers notebook or desktop and can help them set up and support the network in the home, providing the service and other bits and pieces that they may not have traditionally sold to them,” he said.
In order to pick up on the opportunities, IDC’s Sager said it was essential partners work with vendors that had a product roadmap plan for the digital home market — since many did not.
“It’s fruitless to be with a vendor that doesn’t know what they’re going to do yet in this space,” he said.
Many vendors — particularly monitor players — still had separate product lines.
“If you were to go buy a 19-inch LCD to use for your PC, but also as part of your digital home, some vendors are not able to provide that blend,” Sager said.
Despite the slow start and product confusion among IT resellers, AV resellers and mass merchants, several factors are fuelling the market and generating a buzz. Not surprisingly, one of the biggest factors, Wong said, had been the price drops.
“Plasma screens, DVD players and camcorders — all of those CE products are dropping in price, and so people are starting to look towards those things and want the ability to play digital files,” he said.
The broadband uptake was also fuelling the market, Wong said.
“There’s more digital content out there available for consumers,” he said. “As soon as digital content increases, it has to move away from the realm of just being played on a PC — some of the first products promoting that are MP3 players and the iPod.”
But Sager said there were a few inhibitors affecting both consumers and resellers.
“One is interest rate hikes potentially later this year, which will affect the amount of consumer spending,” he said.
“The second is the exchange rate [it’s coming down over the past three to four months] and this is impacting the price of IT. Last year, everything was becoming cheaper, but now things are starting to come back up again.”