Tutorials

According to IDC, the size of the current market for networking products in the home and soho segment is Rs 450 crore, and the segment is growing at a CAGR of 27 percent.

Network vendors such as Cisco (Linksys), Netgear, Digisol, D-Link, Belkin and Asus are creating opportunities for partners by introducing products at regular intervals. There is also a shift in home networking from standard routers, range expanders, and eight port switches (for small offices) to 3G wireless routers, repeaters, NAS storage devices and cloud-based network devices.

The proliferation of devices such as smartphones, tablets, notebooks and netbooks in various form factors, plus other devices such as the Xbox, smart TV, media player, NAS and 3G dongles are driving the connectivity needs of homes. The devices can also be connected via Digital Living Network Alliance-enabled devices to common storage devices and 3G dongles.

“The market is driven primarily by the consumer desire to remain connected, to download music or movies, or to chat with friends,” says Mohit Anand, MD, India subcontinent, Belkin.

Another factor driving the market is price. “Compared to a couple of years ago, networking equipment such as wireless routers, range expanders and 3G routers are now available at prices that are at least 25 percent lower,” notes Navinder Singh Chauhan, GM, Marketing, Smartlink Network.

Portable devices are another driving force. For example, a 3G SIM can now be placed inside a Wi-Fi 3G router instead of plugging the entire dongle to the router directly.

Remarks Chauhan, “Customers demand products that can enrich their lifestyle and that have a feel-good factor. Gadgets do add to the home decor, and are also being looked at as style statements.”

Wi-Fi devices

Multiple devices in households have increased the demand for Wi-Fi connectivity.

“We have around 2.5 million consumer notebook users and 20 million smartphone users,” says Subhodeep Bhattacharya, Regional Director, India & Saarc, Netgear. “We also have three million tablet users, a figure which is expected to cross nine million in the next two years. This translates to a huge growing demand for wireless devices.”

Routers also come with smart apps which help consumers to download movies without the need for human intervention. Vendors are also launching routers with pre-loaded apps that automate backup in an external hard drive even if the PC is switched off.

Cloud networking

“Cloud computing was a nascent concept till about three years back, but now we are beginning to deliver a whole new world of personalized content with anytime, anywhere, any device connectivity,” comments Amanulla Khan, Regional Manager, IMEA, Home Networking, Cisco. “These shifts and disruptions in the market are creating new opportunities and driving the growth of the home networking category.”

According to Tushar Sighat, CEO, D-Link, surveillance is a major opportunity for partners. “Working parents are now able to monitor their homes through surveillance cameras and keep an eye on the children, their parents and possessions from anywhere over the Internet. This can be done by using their smartphones.”

Cloud networking devices such as cameras, storage and routers allow consumers to control, view, share and access their network devices anytime and anywhere.

Netgear’s Smart Network Cloud Application Platform will enable the management of smart home devices from Wi-Fi thermostats for increased energy efficiency to tablets for simple print sharing and cloud printing capabilities.

There is also increased demand for IP surveillance cameras at home. The products are available for Rs 4,000 onward, and are easy to install. With the cloud making remote access easier, more people are using them.

Even in smaller cities partners are doing brisk business. “We sell around 250 3G routers and 200 ADSL routers per month,” informs Vaibhav Jain, Director, Jai Paras Infotech, a Dehradun-based RD. “Most of our customers have 2-3 devices at home such as an iPhone, iPad, BlackBerry and notebook. The cloud-based IP surveillance camera is another product that’s doing good.”

Network storage

Mobile apps have boosted the utility value of NAS drives for home users. Many advanced entry-level NAS drives are bundled with support for mobile apps that let users access content remotely, share files and upload content on social media.

Vendors have come up with NAS products for the home segment whereby users can wireless store images, movies, music and other data from multiple devices simultaneously. Netgear’s ReadyNAS, Seagate’s Goflex and WD’s WD2Go and Remote are some such products. There are wireless routers available in the market which can connect to such storage devices wirelessly. And Belkin is launching a wireless router that can help beam content in a notebook on to a TV.

Says Khalid Wani, Sales Director (branded business), IMEA, WD, “Small storage servers built for SMBs have arrived in the market. They serve as one-stop solutions that offer centralized storage and networking, and do not need to be operated or maintained by IT personnel.”

Greater speed

The trend of home networking devices is moving toward speed. From 802.11n routers to the soon-to-be-launched 802.11 AC routers, networking is fast enabling high data speeds from 1.8 gigabits per second to five gigabits per second. Most vendors are now gearing themselves to use the new technology in their devices.

Since 3G costs are still on the higher side, consumers opt for broadband devices and create a Wi-Fi eco system using broadband routers. “Today, speed is the deciding factor while choosing a router. Due to the demand for high-speed routers, the industry has moved from 64 Mbps routers to 150 Mbps, 300 Mbps or more. Vendors have also come up with easy-to-install solutions,” says Bhattacharya.

Agrees Nand Kishore Rathi, Proprietor, NK Enterprise, an Erode-based reseller, “Earlier I used to sell 64 Mbps routers; these have now been replaced by 300 Mbps routers-cum-modems. I sell around 80-100 such routers per month. Consumers are demanding more of such stuff because most have multiple devices at home.”

The opportunities

The changing consumer mindset regarding home networking products has increased the opportunities for retailers and resellers to earn money. “The perception earlier was that networking meant complicated installation procedures and cumbersome wiring. But today’s products are easy to install and there are plenty of wireless options available. This change in consumer perception has helped partners grow their business,” explains Chauhan.

With the explosion of connected devices and richer Web-based services, consumers are using their home network to improve the quality of life, and these market shifts create opportunities for partners.

Opportunities also arise because many broadband consumers who are yet to go wireless will convert. Adds Khan, “Many current wireless consumers are still on older technology, and they will be ready to upgrade to higher-end products specifically to support their new video-centric Wi-Fi tablets and Wi-Fi TVs.”

Three challenges

The biggest challenge across industries is the depreciating rupee which has increased the input costs of vendors. While some have absorbed the increased costs, many have been compelled to pass them on to the end-user.

There is also the view that the proliferation of ultra-low-cost devices in the market is a big challenge because they not only ruin the market but are also a health hazard. “There are many small players who sell cheap wireless routers. These devices are health hazards because they emit microwave radiation but most of them are not prepared to shield this radiation,” says Bhattacharya.

The lack of widespread Internet penetration is another challenge for vendors and partners alike. According to Internet World Stats, India has achieved an Internet penetration of only 10.2 percent as of December 2011. “The lack of last-mile connectivity is a big challenge as ISPs are struggling to reach the smaller cities in India,” says Anand.