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CE Brands will Dominate the Connected Home

While many technology start-up companies seem to benefit from their unfair share of the media buzz, it's a few mega-corporations who will actually drive the emerging marketplace for innovative 'connected digital home' consumer products.

Sony, Panasonic and Samsung lead the wave of the leading mobile, PC and consumer electronics (CE) companies that are targeting the connected home for their next major growth opportunity, according to the latest research from Strategy Analytics.

The report, "Connected Home Leaderboard: A Strategic Assessment of Leading CE, PC and Mobile Companies," assesses the key business challenges facing major technology vendors that intend to lead in the connected digital home market. By contrast, the strategies of leading PC vendors HP and Dell exhibit significant weaknesses, such as limited proprietary technology ownership and inability to penetrate emerging device segments.

"In spite of the tendency of the general media to focus on emerging players from the PC and mobile sectors, our analysis suggests that traditional consumer electronics companies are currently best placed to dominate the emerging digital connected consumer market," comments Peter King, the report's author. "In our view, with their strengths in both Consumer Electronics and mobile markets, Sony and Samsung are best positioned to address emerging connected device segments."

This report suggests that companies, such as Cisco and Motorola, must address important weaknesses if they are to meet their strategic objectives. Specifically, Cisco has yet to demonstrate successful consolidation of its acquisitions, and must continue to strengthen its consumer positioning, particularly in non-US markets. Motorola has also failed to develop significant synergies between its mobile and connected home divisions.

As I've commented previously, both the Cisco and Motorola business units responsible for manufacturing pay-TV set-top boxes (STB) demonstrate that they apparently can't move beyond the legacy design of unimaginative products that were inherited when they acquired the assets of Scientific Atlanta (now Cisco) and General Instrument (now Motorola).

Both of these vendors had their own pre-acquisition executive leadership challenges in the past, which ultimately sealed their fate -- some analysts say a quick sale was forced upon them by large shareholders. As an example, Donald Rumsfeld served as CEO of General Instrument from 1990 to 1993. Need I say anymore?

Anyway, using a series of business metrics, the Strategy Analytics report ranks the world's top eleven leading consumer technology vendors, according to their performance in key aspects of marketing, consumer targeting, R&D, technology leadership, channel cooperation and product portfolio.

Apart from Sony, Panasonic and Samsung, the companies analyzed included Apple, Cisco, Dell, HP, Intel, Microsoft, Motorola and Nokia. Once again, at the risk of repeating myself like a broken record, I would really like to see some meaningful innovation in STB remote control devices.

STB remote designs that feature 40 to 50 tiny buttons with cryptic labels may seem user-friendly to the engineers that created them, but most mainstream consumers clearly puzzle over these ill-conceived devices that are a mainstay of people's everyday lives. Maybe Cisco and Motorola will choose to rise to the occasion in 2007.

On the other hand, it's really an open field for Sony or Samsung to shake things up in the STB category. However, my hunch is that Apple will be the ultimate disruptor -- Note to Apple, I'll gladly review your iTV product when it's ready for commercial launch.

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