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About This Technology

Today's broadband-connected home networks help residential users enjoy entertainment, perform work, secure their belongings, automate appliances, maintain health and fitness, conduct transactions, and connect people to one another. Hundreds of millions of households have already adopted Wi-Fi, pay TV, online games, streaming services, and diverse solutions for home security and automation. Recently, millions have adopted smart speakers and other speech-controlled, cloud-connected appliances. But home-network technology is at a far more advanced state of development for some users—such as those who route video to multiple TV sets from home servers, use their cell phones from afar to control door locks and check images from home-security cameras, and use wall-mounted touch screens to control lights and indoor climate. Many benefits become possible as a result of novel interconnections among broadband services, storage devices, displays, sensors, software, and other technology elements.

Although "smart-home" technology progressed slowly for decades, mass markets for home networking finally emerged in recent years. Wireless technology and standards help users address some of the key obstacles that they formerly faced—especially the difficulty of installing home networks and handling incompatibilities among multiple vendors. Advanced applications still require either professional installation or system integration by a household member who has suitable expertise and patience. But even the most advanced users and installers face decisions and challenges that reflect unresolved industry issues. For example, pent-up demand exists for house-wide access to entertainment, worries about safety are driving changes in home-security systems, and desires for conservation stimulate use of connected energy-management applications. But installation challenges arise from incompatible technologies, competition among brands, and restrictions arising from industries' digital-rights-management practices. As a result, opportunities remain for players to simplify the installation of connected-home technologies. To accomplish this goal, players need to navigate a complex business environment that changes as technology and market demand coevolve.

Development of home-networking markets will affect household lifestyles, the business environment for industries that sell retail products and services, and suppliers to those industries. Future users will enjoy new content-delivery channels, an array of new telecommunications services, and a sense of command and control over household security and comfort. Manufacturers, service providers, retailers, and other organizations are creating complex multiparty business models, investing in large R&D programs, and devoting a good deal of marketing effort to home-network business development. Winning organizations maintain high awareness about what basic and applied technologies are emerging, players' technology strategies, specific benefits that will become possible as technology progress translates into value, what technologies households are prepared to accept, and how they make technology decisions.