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A
Primer on Structured Wiring
You
may have heard of a new product called "Structured Wiring". Many
homebuilders are touting it as a way to "digitally-enable" and
"future-proof" your home. What exactly is structured wiring, and do you
really need it? Read on for the answers to some common
questions.
What is structured
wiring?
Structured wiring is a generic term used to
describe many different types of residential wiring products currently on
the market. These products all have the same basic purpose -- to
efficiently distribute a variety of data signals throughout your home.
Signal types supported range from those you are probably familiar with,
such as cable television and telephone, to those you may not be so
familiar with, such as Ethernet computer networks. To give some more
practical (and exciting!) examples, a structured wiring system is the
backbone which will allow you to:
• Play a DVD in one
room, and watch it on any other TV in your house
• Listen to your
stereo in any room of your house
• Place video cameras
at your front door, in the back yard, and in the baby's room and watch the
pictures on any TV
• Hook multiple computers up to one internet
connection
• Send files between all computers in the
house
• Share devices such as computer printers and
fax machines
• Have over a dozen different phone
lines
• Easily make adjustments to all of these
options as your family's needs change
How does it
work?
As a starting point, it is useful to think of
a structured wiring system in terms of your house's electrical system.
Electricity flows into your house through a main power cable. This cable
connects to a circuit breaker box, where it is separated and sent down
smaller electric lines. These lines wind their way through your walls,
ultimately ending at power outlets placed throughout your home. You then
plug devices into the outlets and use them.
A structured wiring
system functions similar to this. All external data lines (such as cable
television, telephone, or internet) come into the house and are connected
directly to a central control box. This box is usually the size of a large
electric circuit breaker panel, and is placed in a similar location, such
as in the basement or a utility closet. Within the control box, each
incoming signal is split and sent down wires to multiple rooms in the
house. In a good quality central control box, the splitter will also
contain a signal amplifier. This device makes sure each outgoing signal is
as strong as the single incoming signal. Without an amplifier, the power
of the incoming signal gets split among each outgoing wire, often
resulting in significant performance loss. In layman's terms, this means a
snowy TV or staticy phone line.
From this box, bundles
of wires run through the walls of the house to different rooms. With a
good structured wiring package, these wires will be installed in a "home
run" or "star topology" configuration. This means that each set of wires
runs to only one outlet. This is in contrast to "daisy chaining", which
means one line goes first to your kitchen, then to your living room, then
to your bedroom. Although daisy chaining is less expensive, it introduces
problems as the signal quality in your bedroom (the last stop) is much
poorer than that in your kitchen (the first
stop).
The wires included in the bundle vary by
manufacturer, but you should look for at least two coaxial cables of RG-6
quality and two twisted pair cables of CAT-5 quality. Coaxial cable is
just a fancy name for the typical black cable you use for purposes such as
connecting your VCR to your television -- the type with the copper wire
sticking out the end and the annoying screw attachment. RG-6 is a rating
of quality; some manufacturers use RG-59 or lower grades, but you should
avoid these as your picture quality will not be as good. Twisted pair is
another fancy name, and refers to the telephone cable that runs to the
phone jack on your wall. It is called twisted pair as it consists of two
wires that are twisted around each other. (As strange as it may seem, the
twisting actually improves the quality of the signal!) CAT-5 is a an abbreviation for Category Five, another indicator
of quality. Generally higher numbers indicate better quality, although you
should note that CAT-5e is one step better than
CAT-5.
These cables are often bundled together and
covered with a plastic coating. This is advantageous as a bundle is easier
to install, and the stronger wires (RG-6) help to protect the weaker wires
(CAT-5) during the installation process. (With good quality wires, there
will be no loss of performance or interference from bundling.) This bundle
is run through the walls of your house, and terminated at a wall plate.
These plates are about the same size as a normal wall face plate.
Depending on the wires included in the bundle, it will have from two to
eight different outlets. For example, with the four-wire bundle described
above, the wall plate would have two cable jacks and two phone
jacks.
Why so many
wires?
So far, the structured wiring system described
does not offer much beyond a house's standard wiring. This is where the
second cable and phone lines become important. The first cable line
carries a signal from the control box to the wall plate -- for example, a
satellite TV signal. The second cable line can then be used to carry a
signal back to the control box -- for example, the output from your DVD
player. With the appropriate module inserted in the control box, this DVD
signal could then be amplified and sent back over all outgoing cable lines
on an unused channel number. You could then watch the DVD on any TV in
your house simply by tuning to the previously unused
channel.
Where this technology really shines is when
setting up a home computer network. For example, you can use a single
CAT-5 twisted pair line to both send and receive computer data. An
advanced control box will be able to decipher the data, and send it to the
correct location. Thus, data coming in over an ISP connection will be sent
to the correct computer, allowing for multiple users to share a single
broadband ISP connection with no interference. Similarly, data can be sent
from one computer and correctly routed by the control box, whether it is
an e-mail message to be sent to a friend overseas, a file to be printed on
your color printer in the upstairs office, or simply an instant message to
your spouse working downstairs.
Do I need to buy
everything right now?
No. Many structured
wiring packages come in different 'feature levels'. If you are on a
budget, you can install a basic system which will provide simple cable TV
and telephone distribution. At a later date, you can add control box
modules to enable additional features such as computer networking. The key
is to make sure you have the bundles of wires running to every important
room in your house. Since these bundles run through your walls, they are
difficult and expensive to add at a later date.
Building a new house,
or conducting major renovations, provides an ideal time to consider
installing at least a basic structured wiring package. Installation costs
are significantly reduced when your walls are open (i.e. before the
drywall is attached to the wall studs). Even if you are not interested in
computer networking or whole home video, it is useful to think of how the
housing market will evolve, and to consider that the future buyer of your
house may desire such features.
http://www.findarticles.com/cf_0/m0AJX/1_65/59280630/p1/article.jhtml?term="structured+wiring"
Plugging Into Structured
Wiring.
Author/s: Bill Zalud
Issue: Jan,
2000
Traditional home wiring can't handle the
explosion of compute, entertainment and communications. Building in
structured wiring is a solution.
Ultra-fast Internet. Sophisticated
high-definition digital home theaters. Automated home energy management.
There's an explosion of unique home systems, not just for owners of luxury
homes, but also for Jack and Jane Average's moderately-priced
home.
But there's a
catch.
Most newly-built homes lack the wiring to
support such computer, communications and entertainment systems that
families are embracing. As techies say: the in-house pipe is too small and
slow for the "connected home."
"The standard new home today features a
wiring package designed 50 years ago," observes Mark Schmidt, with IBM
Home Networking. "How do you tell someone who just purchased a new home
that it's not built to accommodate off-the-shelf home entertainment
systems, or that their children will have limited access to the wide range
of educational opportunities available on the
Internet?"
For builders, a solution is in the home's
wiring, with a new approach called structured wiring. Computer and
communications firms are educating consumers to demand it. Late last year,
IBM, along with Intel Corporation, Lucent Technologies and twelve others,
kicked off a Wiring Americas' Homes consumer campaign as much aimed at
builders as homebuyers.
Managed by the Home Automation
Association, the campaign boasts basic wiring standards that give builders
and consumers a checklist to determine if their new home is being built to
accommodate the latest in communications, entertainment and security
technologies.
Some builders have already championed
next generation in-home wiring. The market for residential structured
cabling systems has grown steadily since 1992 when professional
installations first appeared, most often aiming at high-end custom
homes.
But as production builders and developers
embrace such concepts as structured wiring, installations have grown from
34,500 housing units in 1998 to more than 113,000 housing units last year,
according to Allied Business Intelligence, Inc. (ABI), an
Oyster
Bay, NY-based technology
research think-tank. By 2004, builders will construct about 800,000 new
homes with structured wiring, suggests ABI.
At its basics, structured wiring systems
let homeowners control two or more high-tech systems, such as computers,
entertainment and security systems, lighting, utilities and environmental
controls.
Structured wiring consists of
high-performance cables and other wiring connected to a central
distribution hub. For instance, Wiring Americas' Homes recommends an
approach with multimedia outlets with connections for multiple phonelines
over a high-speed Cat 5 cable, entertainment options over two high quality
"RG6 quad shielded coax" cables and data access over a separate Cat 5
cable.
"Structured wiring is one of the fastest
growing construction products in the country, and we are not talking about
a small niche of home automation techies," says Cynthia Pawlowski, with
Lucent Technologies. "This is a high-volume, mainstream phenomenon that is
happening right now. Multi-unit property owners are already successfully
using built-in Internet access to lure residents, and we believe
single-family builders will quickly see the value of structured wiring as
a competitive marketing advantage."
http://www.connectedhome.org/factsheetwiring.html
|
A "Connected Home"
Fact
Sheet
A "Connected
Home"
A "connected home"
is a living environment that empowers the consumer to maximize the
potential of technology to satisfy personal lifestyle needs. It
gives the homeowner control to integrate two or more home systems to
realize the benefits most desirable for their lives. Those systems
could include communications, computers, audio/visual,
entertainment, security, lighting controls, utilities and
environmental controls.
Applications
While a "connected home" adds security,
peace of mind and convenience to day-to-day activities, the
applications to simplify life are nearly endless. There are many
advantages and conveniences of a "connected home" including:
- Connect to the Internet
Advanced wiring systems allow
consumers to "plug-in" personal computers anywhere in the home to
access Internet services, as well as send and receive e-mail and
faxes.
Multiple computers, printers, fax machines and
other devices can be connected to create a cost-effective and
convenient "home area network" that allows for sharing of files,
printers, games, etc.
Single phone lines can share
Internet access for multiple, simultaneous users without tying up
phones for emergency or other needs.
Families can enjoy
high-speed Internet access and multiple e-mail accounts while
maintaining a single access/service provider.
- Home Office
Professionals can work at home with
the same convenience as at the office. Home offices can
accommodate multiple communication technologies, so the computer,
fax machine, modem and telephone can function simultaneously while
providing the efficiency of the latest in high-speed Internet
access.
- Home Entertainment
Homes are equipped to readily accept
all entertainment systems/distribution services (including: direct
broadcast satellite, DVD, cable, etc.). Homeowners have maximum
freedom and flexibility to direct audio and video services on
demand to all or one outlet in the home-from the bedroom to the
home theater.
- Environmental Controls/Energy
Management
Access to
sophisticated heating and cooling controls offers maximum comfort
and efficiency. This allows the homeowner the flexibility to
control HVAC, the water heater and other appliances to work more
efficiently when necessary and automatically shut down/turn down
when not needed to save on overall heating and cooling costs.
- Security and Property
Protection
A
"connected home" can contribute to numerous security protection applications including the
use of intelligent lighting controls, monitoring systems and
motion detectors. Security systems can be linked with PCs,
intercoms, HVAC controls and lighting systems to give the
homeowner optimum control and flexibility.
Components of a Home Wiring
System
The wiring
infrastructure in most homes has not changed in 50 years and
is unable to fully support the technologies that are available to
consumers today. However, today's wiring systems are created to
handle today's technologies and provide the electronic foundation
for a "connected home." This advanced infrastructure is necessary to
ensure that your family can be connected to today's services and
prepared for new technologies. An advanced home wiring system is
usually comprised of three main components:
- The service center. This service center is the part where
all outside services enter the home, including cable TV,
telephone, DSS satellite, Internet, etc. This central hub
distributes these services to locations throughout the house in a
way similar to how the electrical breaker panel controls
electricity flow.
- High-performance cables. Certain services like digital satellite,
high-speed Internet, and digital TV require high performance
cables to allow full access throughout the home.
Most
systems include RG-6 coaxial cable for TV and video, and Category
5 or better twisted-pair cable for telephone and data. Coaxial
cable provides maximum protection from interference with your TV
picture. Category 5 or better cable provides high-speed access to
multiple phone lines without cross-talk. These cables deliver all
the performance you need today, while providing the capacity to
handle tomorrow's technology.
- Outlets. The outlets in each room determine which
services are available in that room. Each outlet can be customized
to a consumer's specific needs based on which services are desired
in each room (cable, Internet access, telephone, etc.). Without
the proper outlets, the high-performance wiring behind the wall is
of little value.
Structured Wiring vs.
Conventional Wiring
Think of wiring as a pipeline for
information. Conventional wiring has the data capacity of a squirt
gun. By comparison, structured wiring, using Category 5 cables, has
the capacity of a fire hose. Structured wiring can transmit more
information, faster.
Conventional wiring, which is found
in most homes, consists of one or two twisted pairs of wires, and is
adequate for basic voice, fax or data communications.
Structured wiring is more advanced
wiring. Not only can it handle traditional telephone, fax and data
communications, but also sophisticated video and data signals from
computers.
The
Investment
Regardless of
size, location or cost of a home, incorporating minimum wiring
standards can add value to the home at resale and effectively ensure
optimum access to all developing home communication, entertainment,
security and control technologies.
A "connected home" can be achieved
today with minimal investment and is not limited to custom
construction. In most cases, prices for structured wiring solutions
range from approximately $750 to $2,000, installed. The initial
investment varies depending on the scope of an installation, with a
range of upgrade and home control options available to consumers who
want maximum control.
In addition, to ensure that your
home is "future-proofed" and your investment secured, it is
recommended that a 2" PVC pipe be installed from the basement to the
attic. This will enable new wires to be pulled, if ever necessary,
between floors without having to replace walls or ceilings.
Resale Value
Homes built today without an upgraded
wiring system will not be able to accommodate the demands of new
technologies. As such, they will not retain value as strongly as
those built with a solid technological infrastructure and, in fact,
may not even be considered by a large percentage of future
homebuyers. With the rapid growth of new technologies for the home,
the ever-changing working environment (telecommuting, home business,
etc.), and the revolution in home education and entertainment
opportunities, it is predicted that installing structured wiring
will potentially increase the resale value of the home.
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http://www.parksassociates.com/reports&services/reports/tocs/wiring_update.htm
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By Kurt Scherf,
Vice President of Research; Michael Cai,
Research Analyst |
Publish Date: Sep 02
Pages:
102
Figures: 209 |
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Synopsis |
|
This report profiles the main players,
provides updated forecasts (both new start and retrofit), and
addresses emerging questions about additional applications and
services that can be combined with structured wiring to provide
complete end-to-end solutions for today's (and tomorrow's)
homeowner.
Structured Wiring on the Rise
"Over the span of just a few years, we
have witnessed a remarkable shift in how home builders and other
critical channel partners view structured wiring solutions," said
Kurt Scherf, vice president of research for Parks
Associates.
"These systems are now being deployed as standard
across the country and among a wide variety of housing types – from
high-end custom-built homes to production and modular homes and
including multiple-dwelling units and existing households."
|
http://www.parksassociates.com/inthePress/featured_articles/1999/kurt-hometoys-aug.htm
|
By Kurt Scherf
www.parksassociates.com
August
1999 |
|
George Jetson probably never gave much thought to
the technology behind his talking computer, the moving sidewalks,
the video phone, or the other time-saving devices found in his
futuristic world. He didn’t have to – things simply worked when he
wanted them to do. Although nobody is predicting that the home will
soon resemble George Jetson’s domicile any time soon, a growing
number of companies are offering a solution today that is likely to
revolutionize the way in which consumers interact with computers,
control various home systems, utilize entertainment components, and
enjoy enhanced comfort. This "hidden revolution" – the installation
of a high-quality wired infrastructure (or "structured wiring") – is
probably occurring in new housing developments in your city right
now.
Home networking, once thought to be the realm of
Hanna-Barbera cartoons or the elite upper crust homeowner, has come
a long way. In just the past 18 months alone, a number of
consortium-led efforts have created specifications for so-called
"no-new-wires" networking, which essentially means that computer and
entertainment data can be sent down the same phonelines or
powerlines in use in the home currently, or through the air via
radio frequency signals. Groups with strange-sounding names such as
HomeRF, HomePNA, and Bluetooth are all vying to sell products that
allow such devices as computers, entertainment components, and
communications systems to be seamlessly linked in the home without
the need to install additional wiring.
In light of the heavily marketed "no-new-wires"
solutions (which are touted as low-cost and easy-to-install
products), why are so many players betting that consumers will opt
for whole-house wiring? According IBM Corp., which is pursuing
market penetration via its Home Director™ wiring and whole-house
control solution, wiring offers a basic advantage over wireless
applications. Andrew Hayden, spokesperson for IBM, says that home
networking is driven by two main applications – computing and
entertainment. "If you look at these key drivers," Hayden notes,
"the wires we’re putting in today are capable of carrying the
entertainment of tomorrow, including high-definition television
(HDTV). Wires will always work, and they will always be
reliable."
Although Intel Corp. has also been a strong
player in the field of "no-new-wires" networking, it has also lent
its support to a new industry initiative called Wiring Americas’
Homes. Intended to educate consumers and builders on the need for a
more advanced communications infrastructure in the home, the
consortium also includes such players as IBM, Lucent Technologies,
OnQ Technologies Inc. (which recently spun off from AMP Inc.), and
other well-known wiring players.
"The ability to connect multiple PCs and in the
home is becoming increasingly important for consumers," said David
Redelfs, capabilities marketing manager for Intel Architecture Labs.
"Wiring
Americas’
Homes addresses the need for wiring in new homes by providing a
template for builders to affordably install the necessary wiring for
home data and entertainment networks."
A number of companies agree with these
assessments, and the race to bring a high-quality communications
infrastructure to the home has been joined by numerous companies
offering advanced wiring solutions they say will "future-proof" a
residence for unforeseen networking needs. With a market projected
by Parks Associates to be worth more than one-half billion dollars
annually, it is expected that more homes will be pre-wired with an
advanced networking infrastructure. In other words, the networked
home that you thought was decades away may be sitting in the
development just down the street from you!
A Brief History of Communications
Wiring
Until the divestiture of AT&T in 1984, only a
telecommunications employee was allowed to pre-wire the home for
communications needs. Following the breakup of Ma Bell, however, any
number of installers can now install wiring, but without one
standard way of wiring a home, the communications infrastructure in
most homes is inadequate for services beyond simple voice
transmissions. And even that can be a problem. Many homes experience
the problem with "crosstalk," – interference from another telephone
line or radio signals that disrupts voice transmissions. BellSouth,
for example, reports that it has had as many as 90,000 service calls
per year to investigate crosstalk complaints. At $100 per truck
roll, it’s an expensive problem, and the Company lays blame squarely
on inferior wiring and poor installation techniques.
A voluntary industry standard completed by the
Telecommunications Industry Association (TIA) in 1991 was the first
attempt to address the installation of communications wiring. For
the first time, an organization officially recommended the
installation of a minimum Category 3 telecommunications cable which
would be configured in the "star" or "home run" topology from a
central connecting point (Figure 2). Unfortunately, ANSI/EIA/TIA, as
a voluntary "standard," lacked the punch to convince many developers
of the benefits of higher-quality cabling. The reason? According to
the Federal Communications Commission (FCC), builders tend to select
"premises wiring on the basis of cost rather than performance."
According to one player in the structured wiring
industry – Utah-based FutureSmart Networks Inc. – cost shouldn’t be
an issue when talking about "futureproofing" (the Company has
trademarked the mantra) the home for tomorrow’s unforeseen
applications. First, company officials state that the cost to
pre-wire a home for advanced services is negligible when consumers
can amortize the cost (which Parks Associates estimates at between
$1,000 and $2,000 for an average house) over the span of a 30-year
mortgage. Second, officials at FutureSmart Networks argue that the
cost to add additional networking capabilities down the road –
including computer networking or the ability to distribute video
signals to any television in the home – can be as high as 60% over
the cost of pre-wiring with a structured wiring package. FutureSmart
Networks, for example, generally provides two
Category 5 unshielded twisted pair (UTP) cabling, two RG-6
quad shielded coaxial cables, and two fiber optic cables to every
outlet. Most companies in the business provide similar cabling,
although FutureSmart Networks is one of the few companies that
includes optical fiber, arguing that advanced services down the road
will require a great deal of bandwidth that only fiber can
handle.
Current Activities
Although structured wiring has been slow to catch
on, indications are that the industry is well positioned to provide
the needed network infrastructure for hundreds of thousands of newly
built homes. Parks Associates’ research indicates that growth will
occur thanks to higher interest on the part of both consumers and
developers.
The Consumer
·
Parks Associates’ consumer research
indicates that new home buyers are more receptive to pre-wiring
their homes with an advanced network infrastructure. For example,
37% of consumers planning to move into a newly constructed home in
the next 18 months indicated they would have their homes pre-wired
with structured wiring (from Parks Associates’ Electronic Living
@ Home II survey).
·
Not surprisingly, consumers who own
PCs or who are considered entertainment buffs (owning high-end
equipment such as home theaters, big-screen TVs, and DVD or
laserdisc players) are more likely to want the advanced network
infrastructure. These consumer segments continue to grow. Parks
Associates’ research indicates that PCs are now found in more than
50% of US households (households with more than one PC account for
14% of all households). Home theater penetration sits near 20%;
big-screen TVs are in more than one-third of households; and
consumers tell us that they want even more entertainment
applications in the home.
The Builders
In research conducted by Parks Associates, home
builders acknowledge that consumer demand for structured wiring
largely drives them to install the high-quality network
infrastructure in new homes. Not surprisingly, therefore, the number
of agreements that are being reached between home builders and
structured wiring manufacturers has increased in the past few
months. For example:
·
In November 1998, Lucent Technologies
announced agreements valued at more than $22 million to provide as
many as 55,000 new housing starts with a high performance wiring
network over the next three years. Under the agreements, Lucent’s
HomeStar® Wiring System will be installed in new homes being
constructed in Las Vegas,
Nevada;
Gilbert,
Arizona; and
Miramar,
Florida.
·
On February 2, 1999, Bell Atlantic Atlantic
Communications and Construction Services Inc. (BACCSI), a subsidiary
of Bell Atlantic Corp., announced an agreement with IBM to deliver
IBM Home Director™ home networking systems to homeowners throughout
the northeastern United
States. Bell Atlantic officials
predict that the Home Director™ system will be installed in as many
as 10,000 new homes in 1999, and they anticipate that as many as
15,000 homes will be wired in 1999 with "a mix of advanced wiring
systems," including IBM’s Home Director™ home networking system. On
June 28, IBM and SecurityLink (a unit of Ameritech Corp.) announced
an agreement whereby SecurityLink becomes IBM’s first nationwide
integrator of the Home Director solution.
·
FutureSmart Networks Inc. reports
that it has a builder program of 27 who are installing the FIN
solution as standard. The Company anticipates that approximately
17,000 homes will have the FIN system installed in the next three
years.
·
OnQ Technologies Inc. reports that it
has agreements with well over 100 production builders to integrate
its AMP OnQ System into residences.
As consumers and builders continue to look at
networking as a means to increase household functionality, safety,
comfort, and value, Parks Associates anticipates that the demand for
the high-quality infrastructure provided with a structured wiring
package will grow. By 2004, for example, 40% of all newly
constructed homes (including both single-family and multi-dwelling
units) will be pre-wired for advanced services with a structured
wiring package or its equivalent.
The growth in the structured wiring market means
more opportunity for the installing dealer and contractor who have
been properly trained in its installation. As the "hidden
revolution" of advanced wiring infrastructure in homes gains more
prominence, expect to see greater numbers of builders installing
structured wiring as a standard feature. No, we’re not going to see
Rosie the robot maid or the flying car in use anytime soon, but more
consumers will be able to take advantage of advanced new services
thanks to the technology hidden behind the
walls. |
http://www.parksassociates.com/WhatIsThis/media/kurtcepro.htm
By Kurt
Scherf
Analyst,
Parks Associates
That rumbling you've been hearing is the sound of a market in motion.
The structured wiring industry, riding the in-home networking tidal wave,
appears primed for tremendous growth as we enter the new millennium.
Recent news supports this contention:
In November 1998, Lucent Technologies announced agreements valued at
more than $22 million to provide as many as 55,000 new housing starts with
a high performance wiring network over the next three years. Under the
agreements, Lucent's HomeStar® Wiring System will be installed in new
homes being constructed in Las Vegas,
Nevada;
Gilbert,
Arizona; and
Miramar,
Florida.
On February 2, 1999,
Bell Atlantic Atlantic Communications and Construction Services Inc.
(BACCSI), a subsidiary of Bell Atlantic Corp., announced an agreement with
IBM to deliver IBM Home Director™ home networking systems to homeowners
throughout the northeastern United
States. Bell Atlantic officials predict
that the Home Director™ system will be installed in as many as 10,000 new
homes in 1999, and they anticipate that as many as 15,000 homes will be
wired in 1999 with "a mix of advanced wiring systems," including IBM's
Home Director™ home networking system. Bell Atlantic's Manager of Business
Development Greg Farmer says that BACCSI has signed up at least 100
builders to participate in its "Bell Atlantic Ready" program.
AMP Inc. reports that it has agreements with well over 100 production
builders to integrate its AMP OnQ System into residences. Other structured
wiring manufacturers also report success in gaining builder support (as
was presented in the February 1999 issue of CE Pro).
Greyfox Systems, a Pittsburgh-based company specializing in the design,
development, and manufacture of residential home networks, reports that it
sold enough residential wiring networks in 1998 to facilitate 12,000 home
installations. The Company, which provides either complete wiring systems
or key components to four of the top five structured wiring vendors,
expects this number to triple in 1999.
These announcements point to a path of solid growth for the integrated
wiring industry, and Parks Associates attributes this optimistic future to
a number of key variables. First, home networks are indeed a reality, and
the drive to bring home networking to the mass market has begun with both
computer and entertainment networking applications. As more consumers
bring higher-bandwidth services into their homes, we expect them to seek
ways in which to distribute that information throughout the home. The
growth in cable modem and digital subscriber line (DSL) technologies into
the next century will be indicative of greater consumer demand for and
acceptance of high-speed Internet services.
Second, as consumers become more aware of the kinds of applications
they would like to have in the home, a whole-house integrated wiring
system will bring more value, specifically in new housing starts. Parks
Associates' consumer research indicates that consumers with high-end
consumer electronics and entertainment products/services are more
receptive to installing a whole-house structured wiring system.
Third, the aforementioned agreements between structured wiring
manufacturers/distributors and home builders is indicative of the fact
that more home builders are recognizing the value of structured wiring.
Builder resistance to structured wiring lingers, however, primarily due to
concerns of cost. We believe, however, that the installation of structured
wiring is a value proposition, and this message will meet with more
receptive ears, both on the builder and consumer sides.
Entertainment and Data Networking Applications as Key Drivers
"We
started out thinking that home automation would be the Holy Grail," said
David Marshall, Vice President for Marketing at UStec. After watching the
in-home network market struggle to grow on that premise since 1992,
however, the Company reached the conclusion that many industry players
(and Parks Associates) have similarly reached. "What's really driving the
industry," he said, "is telecommunications - the linking of computers, and
sharing high-bandwidth Internet connections." That message is the one that
should be proclaimed to builders and consumers alike, according to North
Carolina-based CommScope Inc.'s Vice President of Market Development Dale
Sherrill. "It's a multimedia issue," said Sherrill, who explains that the
distribution of voice, video, and data over a high-quality infrastructure
is currently the driving force behind the industry.
The ability to distribute broadband Internet data throughout the home
will become more of an issue as such technologies as cable modems and
digital subscriber lines (DSL) begin to penetrate a larger share of
US
households. At present, the penetration of cable modems is much greater
than DSL services (see Figure 1). With the initial approval of a standard
for an ADSL technology known as "G.Lite," (which is estimated to deliver
data at speeds between 1.5 and 9 Mbps) in late 1998, ADSL deployment is
expected to pick up strength. As it will take a few years before both ADSL
and cable modem services are widely available, head-on competition between
the two services will occur in only a small number of markets in the near
future. Eventually, however, ADSL and cable modem service will have to
compete for the same customers in the same market.
The proliferation of high-speed Internet services to the home will have
a bearing on all players in in-home networking, but it affords
manufacturers of structured wiring an enormous opportunity. Although the
next couple of years will witness the widespread proliferation of
"no-new-wires" computer networking solutions, these high-speed
technologies are currently limited to 1-2 Mbps of data transfer and are
aimed primarily at existing homes where retrofitting will be cost
prohibitive. The only sure way to avoid the bandwidth "logjam" in the home
is an integrated wiring solution, and Parks Associates believes that this
statement will hold true well into the future. The new home should be
installed with the high-quality (and high-bandwidth) infrastructure that
is only available with a whole-house integrated wiring solution. The
additional cost is incremental compared to a lower-quality wiring, and the
benefits and value it brings to the homeowner are well worth that price.
There are plenty of horror stories attributed to low-quality wiring in the
home (BellSouth, for example, reports that it receives approximately
90,000 service calls per year for "crosstalk" problems), and the
structured wiring industry needs to capitalize on the fact it offers a
high-quality solution specifically rated for high-bandwidth data
transmission.
Figure 1
What Are Consumers
Thinking?
With a bevy of digital consumer electronics
products currently available or soon to hit the market, consumers are
beginning to demand ways in which to provide for high-speed connectivity
throughout the home. The Consumer Electronics Manufacturers Association
(CEMA) forecasts that digital television (DTV) sets will reach 30%
penetration after only eight full years on the market (2006). The
organization also predicts robust sales of digital versatile disc (DVD)
players. Although it remains to be seen if actual sales reflect this
aggressive forecast, Parks Associates believes that both platforms will
play a significant role in home entertainment. Consumers are beginning to
demonstrate an interest in the kind of applications fostered by a properly
wired home. For example, 22% of 1,000 consumers surveyed by CEMA in 1998
indicated that they were "very interested" in watching a video on any TV
in the house from a single VCR. However, to pump the high-quality video
provided by these and other digital products throughout the home, a great
deal of bandwidth is required. Industry estimates indicate that 18 or 19
Mbps of throughput is necessary to facilitate networking between a digital
television and another device.
The bottom line is that only a high-quality integrated wiring system
(such as provided in a structured wiring package) will provide for the
kind of bandwidth infrastructure necessary to foster today and tomorrow's
applications. According to Parks Associates' research, select consumers
are highly receptive to this message. Figures 2 and 3 illustrate results
from a 1998 Parks Associates' consumer survey in which we asked consumers
if they are willing to install structured wiring in a newly constructed
home. As indicated, it is those consumers who own PCs or who are
classified as "entertainment philes" who are more receptive to structured
wiring.
Figures 4 and 5 show the results from two
separate consumer surveys on structured wiring's appeal. Figure 4, from
Parks Associates' Electronic Living @ Home™ II study, indicates that
although many consumers are still not receptive to a structured wiring
package, others are. The results from CEMA's Integrated Home Systems
Potential survey, as shown in Figure 5, demonstrate similar results. What
is key to note is that a whole-house integrated
wiring system costs much less than $5,000. Parks Associates estimates that
an integrated whole-house wiring system for a "typical" 2,200 square foot
house costs approximately $2,000, including installation.
This data is indicative of homeowners as a whole. The sub-$1,000 PC
market is heating up (industry reports indicate that 60% of PCs sold in
January 1999 cost less than $1,000); direct broadcast satellite (DBS)
service has reached 10% penetration; and consumer demand for entertainment
products and services shows no sign of abatement.
Figure 2
Figure 3
Figure 4
Figure 5
…And Builders/Installers?
Manufacturers acknowledge that
bringing the builders on board with structured wiring has been difficult.
Parks Associates’ builder research indicates that cost has been a major
hindrance to acceptance.
Some new efforts may bring wiring to the forefront. A volunteer
industry group using the mantra "Wiring America’s Homes" is developing a
public relations effort emulating the success that "Got Milk?" campaign
has experienced. The group includes such wiring companies as Lucent
Technologies, CommScope Inc., Essex Wire and Cabling, and AMP Inc. in
addition to industry giants that realize the need for better wiring in US
homes. The effort, initiated in 1996, is really just beginning, and its
impact remains to be seen. The goal is to educate consumers and builders
about the benefits of better wiring in the coming digital age. The end
goal is to encourage builders to offer such wire and consumers to demand
it.
Recent data (and our discussions with both builders and manufacturers)
indicates that builders are coming around. As mentioned earlier,
structured wiring manufacturers have had success in creating alliances
with builders. From our recently released 1998-1999 Dealer
Survey, more than 50% of installing dealers indicate that they are
installing whole-house structured wiring (Figure 6).
Other telling builder statistics are derived from a 1998 survey
conducted among 450 Chicago-area home builders. In July 1998,
Professional Builder magazine published the results of its
Professional Builder/Greater Chicagoland Housing Foundation study.
Two statistics, in particular, point to an increasing awareness that
structured wiring will play an important role in newly constructed homes
into the next century:
- Reflecting
the role that the PC will play in tomorrow’s homes, nearly two-thirds of
the builders surveyed (64.9%) indicate that preplanned space for a
computer will "definitely" be included as standard in newly built homes
(Figure 7). As more
US
homeowners classify themselves as "work-at-homers," preplanned office
space (including areas for computers, fax machines, and other office
equipment) will become more important. This provides an excellent
opportunity for an integrated wiring system to handle both voice and
data traffic.
- Overwhelmingly,
the builders state that integrated wiring
systems will be "important" in the next century (Figure 8). There is no
question that builders are beginning to understand the importance of
quality cabling in a home. The challenge for the industry, however, is
convincing the builders on the value that a whole-house
structured wiring system will bring to a new home. The ultimate
decision, alas, may still come down to dollars and cents.
Figure 6
Figure 7
Figure 8
Parks Associates’ Projections
Based on the above variables,
Parks Associates has forecast a growing market for the structured wiring
industry into the next century. Figure 9 illustrates our forecast for the
end-user market value of the structured wiring industry (based on both
single and multi-family installations. Parks Associates anticipates that
the overall market for both single and multi-family installations will
exceed $530 million by 2004.
Figure 9
The in-home network wave is racing toward a crest early in the next
century. If the structured wiring industry can continue to build support
among builders and consumers through mass marketing and awareness
campaigns, it will be well positioned to take advantage of the ensuing
flood.
Kurt Scherf
Kurt Scherf is an in-home network analyst for
Parks Associates, a Dallas-based market research and consulting firm that
studies emerging residential technologies and services. Parks Associates
publishes reports and journals, hosts industry gatherings annually, and
provides custom information for Fortune 500 technology-based companies.
Mr. Scherf is the author of Networks in the Home: Emerging Technologies
and Standards and Analysis and Forecasts. For more information
on this report, call 1-800-727-5711 or e-mail contact@wireitonce.com. Mr.
Scherf is available at 972-490-1113 or at contact@wireitonce.com.
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