Is 2011 The Year of Powerline Networking?

Having followed the home networking market for over a decade, I’ve gleaned a few lessons along the way:

A decade is probably too long to analyze any market, let alone home networking.
It’s a market of a thousand turf wars — many of them over now — for physical layers, software protocols and product categories. (Fun piece of home network nostalgia for the day: While Intel no doubt helped Wi-Fi go mainstream with Centrino, the company once saw Home RF as the future of the wireless home. Luckily for them, they eventually came to their senses.)
The home network has become a critical but largely invisible services platform for all things from Netflix to pay TV.
As connected entertainment becomes the dominant traffic and demand driver, the nature of the home network itself is changing.

One technology, Wi-Fi (and the spec underlying the Wi-Fi brand, 802.11x) not only won the turf wars, but effectively dropped a nuclear bomb on any competing networking technologies. In fact, it’s a pretty easy argument to make that Wi-Fi has been the single most important technology in the connected-home marketplace for the past decade.

But while Wi-Fi continues to be required on any connected entertainment device, that doesn’t mean the experience of Wi-Fi is always optimal. Anyone whose streamed Netflix over a significant range or a few walls knows the quality of the stream falls off pretty quickly, and sometimes will not work at all.

So what else is there? In the pay-TV space, U.S. providers like Verizon have settled on MoCA (a coax-based networking technology), while many European IPTV providers have adopted powerline, in particular HomePlug, for in-home distribution.

While MoCA is almost exclusively a service provider technology, HomePlug is also available at retail, where all indications suggest the technology has started to take off. Discussions I’ve had with both home networking equipment and chip providers over the past few weeks put estimates of consumer powerline shipments at close to 10 percent of Wi-Fi unit shipments today. That may seem like a small number, but it’s one that would have seemed impossible just a few years ago.

This growth in powerline networking hasn’t gone unnoticed by the industry, as almost the entire powerline networking market was rolled up over the past year and a half. It started with Atheros buying Intellon, then Sigma bought Coppergate (for powerline & HPNA networking), Marvell picked up DS2, which likely spurred Broadcom to buy Gigle.

With all of this investment in HomePlug from the silicon side, there’s no doubt more integrated chipsets will make there way to market. One of the early efforts is by Atheros with their Hy-fi integrated Wi-Fi/HomePlug solution, which has been resulted in new Wi-Fi routers from both D-Link and Netgear that feature HomePlug ports.

This embrace of powerline isn’t a sign that Wi-Fi is on the decline, but instead that numerous technologies need to be embraced as entertainment distribution shifts to IP. In fact, the industry recognized that making all disparate home networking technologies work together should be the end-game, and to help reach that goal the IEEE has started efforts to create a software abstraction layer to enable seamless networking no matter what the physical layer.

See my weekly analysis at GigaOM Pro where I define three trends — one of which is alternative high-speed networking technologies — define the future digital home.

Image courtesy of flickr user viagallery

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