Five months ago, Intel undertook a major restructure that saw the company replace product groups with user-defined platform groups. In yet another vote of confidence for the digital home concept, one of its newest and highly touted platform groups is solely focused on the convergence of computing and consumer electronics in the home.
Intel already plays in the digital home space to some extent by designing and building the processors that power a high proportion of consumer notebooks in the market. While its core focus is unlikely to ever shift from market-dominant PC and server microprocessors, the digital home vision provides it with a set of new devices for which it can build processing platforms.
If the company's new Digital Home Group meets its objectives, expect to see Intel silicon architecture in a variety of new consumer electronics devices within the next few years. Think digital televisions, set-top boxes and digital video recorders with an Intel inside.
THE SILICON VISION The shorter-term vision is to build excitement around consumer PCs, particularly those sporting new and more aesthetically pleasing form factors.
"A few years ago the desktop personal computer was not terribly exciting," vice-president and general manager of Intel's Digital Home Group, Don MacDonald, said. "Digital televisions and iPods have got the market's attention - we want to put the jazz and excitement back into the consumer PC."
Beyond this, the processor platforms that power these personal computers will be put to new use. Intel is in the process of striking agreements with consumer electronics device manufacturers to embed Intel's mobile computing processors in set-top boxes, digital video recorders and digital televisions. Existing processors, such as Intel's XScale family, have been discussed as suitable candidates for these CE devices.
But MacDonald said this is merely a temporary phase in what amounts to a far greater commitment to the consumer electronics market. Ahead on the roadmap is the development of a highly integrated system-on-a-chip platform specifically for consumer electronic devices.
MacDonald expects samples of system-on-a-chip offerings to be ready this year - but he is not certain when Intel will be ready to take the technology into full-scale production.
While Intel intends to have its silicon powering a wide variety of CE devices, MacDonald is careful to stress that it has no intention of competing with consumer electronics manufacturers by building and marketing complete CE products. Just as you won't find an Intel-branded notebook on the market, don't expect to see an Intel-branded digital television.
Consumer electronics companies had a heritage of innovation in device marketing, MacDonald said, so Intel would rather cooperate than compete. "Our interest remains at the silicon level," he said. "We have no intention of competing with the likes of Panasonic or Sony."
That said, MacDonald feels pressure is mounting on consumer electronics manufacturers to innovate - some of the same pressures that were mounted on the PC market prior to it becoming a highly standardised and component-driven technology platform.
"There is a lot of pressure on CE manufacturers to include all the new features and capabilities they need to compete," he said. "The market wants low power and low footprint characteristics but it is also demanding lower prices."
The answer, MacDonald suggested, is to lower the cost of CE products by standardising on a silicon-based platform.
CHIPS AND POLITICS Intel has profited significantly from the extraordinary growth of mobile computing and the success of its Centrino platform strategy. MacDonald said that internally, many people were reticent to see the company's focus on mobile computing processors diluted by grand visions of creating platforms for the consumer electronics market.
It has been argued, for example, that going after set-top boxes and digital video recorders is chicken feed compared to the wealth of opportunity the company continues to create in the notebook market. But MacDonald thinks otherwise.
The company sold about 85 million processors into consumer PCs in 2004 and by 2009 it expects the consumer PC market to yield up to 120 million processors. Developing processor platforms for CE devices such as set-top boxes and digital video recorders could potentially generate additional sales of an extra 100 million processors per year, he said.
"The next billion devices sold around the world might not necessarily be personal computers," he said. "Consumer electronics is a tremendous growth opportunity. It could be worth as much as $US80 billion a year in silicon alone."
Success in the consumer electronics market is not as simple as providing this new silicon platform, MacDonald said. The Digital Home Group also has to drive the ecosystem that surrounds these devices. Of particular interest is the need for more reliable wireless networks around the home and the availability of content to drive the uptake of consumer electronics devices and home networks.
MacDonald acknowledged that for the vision to become a reality, users need to be provided with an incentive to purchase new devices that goes far further than merely where they access content in the home. In other words, it will be the content itself that is the catalyst for change - not a fancy new silicon-based device.
QUESTION MARKS The problem for the technology industry is that there are question marks regarding legitimate access and the distribution of content that are yet to be answered.
The Digital Home Group is taking a two-pronged approach to addressing these questions. For a start, it is involved in the lobbying of Government regulators to liberate content. Secondly, it is investing in companies that promote the distribution and fair use of content.
One of MacDonald's roles is to lobby various Governments around the world to consider changes to legislation regarding content. The current legislative frameworks tend to protect incumbent providers at the expense of new online providers.
"The Internet provides a tremendous opportunity to provide content and services into the home," MacDonald said. "But there is a myriad of gory technical detail involved from a legislative perspective."
Intel also fears that users will not warm to the digital home concept until they get a green light on fair use. Transmitting downloaded audio-visual material to various screens around a home using a wireless network is a major selling point of the digital home vision, but under the current murky legislative environment in place in some countries, the practice might actually be illegal.
"There are lots of reasons why you can't do some of these things in the current regulatory environment," MacDonald said.
"We need a regulatory framework that allows, using Digital Rights Management technology, for content to be streamed around the home. At the moment for example, it is illegal in the US to make a copy of your DVD to store on your hard disk. It's illegal, but everyone does it. We think that is crazy. You paid for that content and you should be able to use it how you want."
MacDonald said a lot of content was tied up by lucrative contracts signed for exclusive content providers - such as a cable television company's rights to a football match. But the Internet generation demands content at its fingertips, and will expect such content to be freed up for the wider market before making further investments in devices.
"As a user I just don't care where I get it," he said. "I just want my content."
Lobbying would be matched on Intel's part by an investment in the creation of content-enabling technologies, MacDonald said.
In January 2004, the manufacturer set up the Intel Digital Home Fund, a $US200 million investment program that aids those companies developing hardware, software, connectivity and supporting technologies that enable people to enjoy digital content on multiple devices in the home.
Investing in the wider ecosystem of a technology is not an unusual strategy for Intel. In order to transform itself from a chip company into a platform company, for example, it found it necessary to invest in the wider mobile computing industry.
"Intel had to invest in things like hotspots to make the Centrino strategy work," MacDonald said. "We need to make content companies and services companies feel comfortable that content will be protected. We have to find the right balance between IP protection and fair use rights."
There are also some technical hurdles to overcome in the wireless arena. Moving high definition video around the home is currently a challenge on most wireless networks, with interference from everything from walls and floorboards to microwave ovens and phones having the potential to degrade the quality of the signal.
While newly released products equipped with multiple input, multiple output (MIMO) technology go some way to addressing this problem, few in the industry would deny that more needs to be done. The 802.11n standard, due at some stage in 2006, is expected to make further advances.
ALPHABET SOUP Intel's Digital Home Group is particularly interested in another wireless standard - 802.11s. While 802.11a, 802.11b, 802.11g and 802.11n are all ways of transmitting wireless data, the 's' standard aims to improve wireless connectivity further by allowing for wireless mesh networking on top of these standards.
Wireless mesh networking involves using all manner of wireless devices as routers in order to share data in as efficient means as possible. The theory is that in the tricky home environment, the direct route is not always the fastest.
Wireless mesh networks will have the capacity to automatically discover a new wireless device that enters the network, authenticate it using the 802.11i standard and establish the fastest links between all of the wireless devices on the network to maximum performance.
The 802.11s task group, charged with enabling wireless mesh networking, has heard proposals from some fifty vendors, including most of the usual suspects in the consumer electronics and wireless/cellular communications field. Intel submitted a joint proposal with Japanese communications company, NTT DoCoMo. The specification is expected to be ratified by late 2006, with products using this technology on the market by 2007.
So while sales of consumer wireless devices are booming, making the home network accountable and secure might realistically take another 18 months to fine tune. Add to this the time it will take to develop new silicon-based consumer electronics devices and the struggle to convince regulators to free up content, and its clear that outside of the early adopters, the digital home concept is still going to take a while to take off.
MacDonald has the unnerving task of continuing to encourage the concept from within a company famed for progressing in steady increments.
"In our group, we have a 10-year vision," he said. "We have to move beyond Intel's two quarter impatience. It needs to be understood that the consumer electronics world moves very slowly."