Market Insight

Trends for 2030 in Home Networking

March 18, 2020  | Subscribers Only

Taimur Zafar Taimur Zafar Research Analyst, Service Provider Technology

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The last ten years in home networking have been characterized by the transition of Wi-Fi from a nice to have feature to essential for domestic internet access. This transition was driven by the proliferation of smartphones and tablets, increases in fixed-line broadband speeds and the failure of service providers to make 4G fixed wireless access a viable alternative.

The consumer electronics industry now regards wireless connectivity as ubiquitous and is flooding the market with Wi-Fi dependent smart home devices, leading to congested home networks. The next decade in home networking will be defined by meeting the technological demands of the smart home.  

Wi-Fi specifications will evolve to manage network congestion

Wi-Fi 6 (802.11ax) aims to solve congestion problems by improving performance in densely populated Wi-Fi environments. Orthogonal frequency division multiple access (OFDMA) shares channels to improve network efficiency and multi-user MIMO enables more downlink data transfer at a time, allowing access points to support more devices concurrently.  Towards the middle of the decade Wi-Fi 6 will replace Wi-Fi 5 (802.11ac) as the dominant standard.

In the latter half of the decade Wi-Fi 6 will be succeeded by 802.11be, likely named Wi-Fi 7 for deployment. Early work by an IEEE study group indicates that the goal for 802.11be will be to dramatically increase throughput, by using 160 and 320 MHz transmissions in the 6 GHz band and incorporating 16 antennas, doubling the number of antennas and spatial streams compared with Wi-Fi 6. These advances will enable home networks to provide the symmetry and low latency required for AR/VR and online gaming respectively. These improvements in Wi-Fi technology are likely to become necessary towards the end of the decade, particularly with the spread of AR/VR and online gaming.

Most homes will have several Wi-Fi access points

Wi-Fi 6 and future generations of Wi-Fi will offer improved connectivity to compatible end devices, but aren’t helpful for older devices.. Whole home systems are a better solution for this, and can solve current congestion problems for products from all Wi-Fi generations, using software to actively manage Wi-Fi channels and clients for optimal performance. This allows the entire network to be more efficient resulting in improved connectivity for end devices from all Wi-Fi generations. The advantage of concurrent usage of Wi-Fi channels will see whole home systems become the preferred option even in smaller dwellings that do not require extra coverage provided by multiple access points. With the transition already becoming apparent, whole home Wi-Fi systems will become the dominant home-networking set-up in developed markets by the end of the next decade.

Whole home systems are also ideal solutions for future Wi-Fi generations that will utilise higher frequency spectrum, such as 6 GHz, to increase capacity. These waves are less able to penetrate walls in the home, meaning access points will potentially be required in each room for optimal performance.

Current whole home systems require consumers to purchase all access points from the same manufacturer, which limits scalability. The Wi-Fi Alliance’s EasyMesh standard aims to enable access points from different vendors to work together, allowing consumers greater choice. The ultimate vision for EasyMesh would be to enable mesh access point functionality in other consumer electronics devices, such as smart speakers, streaming media devices, TV sets and even smart white goods. This would remove the need for dedicated Wi-Fi access points and create a home network enabled by the devices using it. As the smart home proliferates, these devices will be present in multiple locations throughout the home and the sheer number of them would negate the need for optimal placement for Wi-Fi performance.

The battle to own the smart home will shift the competitive landscape

Big technology companies, Amazon and Google, have spied the opportunity to own the home network and the associated user data and are competing directly with internet service providers in this space. They have launched or acquired whole home Wi-Fi systems designed to supplant service provider networking equipment in consumers’ homes. Service providers will aim to maintain control of the home network and provide additional services to consumers, creating an interesting battleground between technology companies and service providers.

Improved insights into consumer data will be vital for both Google and Amazon, enabling improvements to their targeted advertising businesses and Amazon’s online store. Use of AI to predict potential products of interest using home networking data will be key strategies for both. Control of the home network will also grant technology companies further awareness of any problems in the smart home and enable direct troubleshooting. Consumers will also be likely to purchase smart home products from the same ecosystem, pushing sales for the rest of their smart device ranges. Partnerships with the incumbent vendors, to offer their software, are already forming allowing access to consumers not using their hardware.

Service providers fear becoming a commoditised pipeline for internet access to the home. They will aim to maintain control of the home network and provide additional services to consumers, including security and parental controls, to retain customers and increase ARPU. Control of the home network will allow a deeper view of issues and easier troubleshooting, enabling service providers to improve customer experience and reduce costs associated with engineer callouts. Wi-Fi equipment rental fees are also a revenue stream for service providers that have them that they will not be quick to lose. Service providers will need to ensure their CPE offerings are able to handle the demands of the smart home and the unique networking requirements of each home. Service providers will offer solutions tailored to the individual rather than the general CPE provided to every customer, failure to do this will create opportunities for the retail solutions.

CPE vendors currently manufacture equipment for service providers while also offering a wider range of products through the retail channel. They are caught in the middle and will need to keep the technological edge over big technology companies and leverage their relationships with service providers to provide larger volumes of CPE through that channel. Partnerships with technology companies to incorporate features such as Alexa and Google assistant will be important in allowing CPE vendors access into the smart home. Some CPE vendors, such as Netgear and D-Link, are attempting to compete in smart home products, consumers, with fears of what Google and Amazon are doing with their data, may be more trusting of a smaller specialist networking company. There will also still be a niche for specialist high end retail products for consumers that find the devices from their service providers and big technology companies unsatisfactory.

With comparable hardware available from different vendors, the competition will be based on what else the whole home system can offer rather than just Wi-Fi enablement. Value added services will be a key area of differentiation. Many whole home systems are already offering companion apps for consumers to monitor the home network, more innovative services such as Wi-Fi motion detection are beginning to be explored by some vendors, with other advancements sure to follow. These software developments will become increasingly important at the service provider level, as consumers will expect similar services from the equipment provided to them. Service providers will be able to offer services enabling consumers to have greater control of the network, while technology companies can offer better integration with the rest of their smart home product ranges.

5G could threaten home networking

5G fixed wireless access will threaten current fixed line access with the ability to bring fast broadband to regions with poor broadband infrastructure. 5G may also become a driver for better Wi-Fi solutions, with consumers becoming used to faster mobile internet speeds, they will also expect similar speeds using their home networks..

There is also a risk that 5G may be the technology to challenge home networking. Fixed devices can benefit from a direct 5G connection. Samsung is already developing a 5G 8K TV with SK Telecom that will allow consumers to stream high quality video. This idea can be expanded to all devices, with built in 5G modules replacing Wi-Fi modules. The necessary connections for smart home applications can then take place in the cloud.

The next ten years will be full of advancements in home networking, fuelled by the battle between service providers and technology companies for control over the home network. Advances in home networking will drive innovation in other technologies and vice versa. Expect faster, smarter and more efficient home networking for a variety of applications, from smart home to virtual reality in 2030.

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