Bandwidth Tangle?
So is it just a case of supply side problem or is there more to the lack of IT's penetration at all levels in an average Indian home? While Japan boasts of a higher penetration of its automated toilet seats than PC penetration, experts suggest that India is typically struggling to get on board because of the sensitive pricing issue and the bandwidth tangle.

Senior semiconductor analyst at IDC, Ida Rose Sylvester, couldn't agree more. Accrding to Sylvester, "Companies that can bring their silicon expertise from carrier class network and security applications into the price-sensitive consumer space may have a competitive advantage in the market."

While there remains no doubt that resolving pricing issues will have to be done going forward, broadband connectivity too is a factor, which under no circumstances can be ignored. No prizes for guessing that at this point of time, digital home is more popular in countries like USA, Australia and Japan.

A research carried out by a US market research firm Parks Associates, which looked at digital living trends in 13 markets in Asia, Europe and North America, revealed that Asian tech giants Taiwan and Korea took the lead, followed by US, Canada, Japan, and Australia in the index.

The study examined the availability, adoption, and use of technology-driven products and services in each individual country. China and India ranked the last two in the index. However, despite the low ranking of China and India, they still have large digital markets in key urban areas because of their high populations, the survey noted.

Interestingly the survey also noted that within Asia, individual countries are developing distinct areas of leadership in driving the digital trend.

While India is using number of digital products, greater broadband penetration holds the key to the growth of digital homes. Perhaps what is worrying is the fact that broadband, which is a key enabler for digital home is virtually missing in India.

As per IDC, India is way behind the other Asian countries in terms of broadband penetration with less than one percent adoption. According to IDC, till 2005 the number of broadband numbers for household segment stood at a disappointing 0.7 mn.

Nevertheless, the industry observers and optimists cross their fingers as they point out that the need to stay connected is getting deeply entrenched in India, and thus that would play an important role. The household PC market along with broadband growing at 25% and 55% CAGR (2006-2010), respectively, is no doubt a positive sign.

Microsoft's Srivastava sounds optimistic, "The technology will only grow. The trend, however, is going to be more of a requirement based house here in India," adding that, "Connectivity is a crucial link to the growth of e-homes. The market penetration at the moment is very little, but we know that the urban Indian lifestyle is growing and improving very rapidly, and we do see it as a great potential market, once broadband penetration further increases."

According to IDC estimates, SEC A, which is the potential target audience for digital home constitutes 2% of the population, while it is only 7.1% of the urban population, which translates to five million homes in India. Another positive indicator is the increasing number of working females (approximately 12%) in the urban scenario.

As the working women population grows in urban areas, a need to have a comfortable lifestyle, and 'get work' done at home will play an important role in the adoption of the digital home concept. Also if the growth in the consumer durables market in India is any indicator, it is time we start talking about digital homes as a concept that is here to stay.

Rx: The Five C Approach
Not that the roadblocks to the digital home and pricing issues have stopped the companies from focusing on the space. To begin with, Microsoft has drawn a two-pronged strategy to promote e-homes. According to Srivastava, "Microsoft is concentrating on creating group concept centres in Delhi and Mumbai, first in order to showcase what technology has in store for people." The company plans to scale this up to 20 cities.

Srivastava sees support coming from urban Indian households, though according to him, the penetration rate is still very low. "There still is lot of hope as we go forward," he said adding that, "It is very important to get more and more partners excited about the concept." Others from the industry feel that although individual digital products are selling like hotcakes, there is still a need to integrate them into a single device or sell it as a complete home solution.

It is perceptible that IT vendors are adopting a broad vision for their digital home strategies. One obstacle that they face will be communicating their vision to consumers-which is too complex and difficult for some consumers to comprehend. Another difficulty faced by IT vendors will be that the retail outlets for their devices tend to be restricted to IT channels, but consumers are accustomed to shopping at CE channels when purchasing devices for home entertainment.

Though the numbers for digital homes right now are no great shakes, but the five Cs are expected to do the trick-control, convenience of use, community, choice and customization, and, most essential, content... Well don't we all buy and use technology because it caters to these core values?

Digital home solution provider, Linksys, banks on support coming from the ease and convenience of use of digital products. Says Sanjeev Gupta, regional sales director, Asia Pacific, Linksys, "It slowly becomes a way of life as users experience it and enjoy it. Increased affordability and the growing need to stay connected will drive growth."

All said and done, convenience of use of technology and efficiency of the product will remain key drivers for the growth of smart homes. So where do we really stand? Are the companies offering the right price for the products, or the right solutions. Who will decide?

Well the golden rule that "consumer is the king," will reign here too. Are consumers open to adopting new technology? Or is it the companies who have to fit the bill by offering right solutions at a great price.

In the absence of any killer application available to consumers at a price, which fits their pocket, one has no option but to go slow hoping that the consumers will adapt to technology. Is that not what all companies are doing?

As the technology is advancing faster than consumers can absorb it or afford it, and with too many choices floating around, are we expecting too much from consumers? That's where simplifying technology-right packaging, value for money and ease of use, portability, flexibility of use, will come in to play and become the key words going forward.

When it comes to digital homes, it's the world where technology would need to adapt to people, versus people adapting to technology...

Urvashi Kaul
urvashik@cybermedia.co.in
With inputs from Shailendra Gupta
sgupta@idcindia.com
Pratima Harigunani in Pune

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