When Intellon announced it had acquired the engineering team and intellectual property of Cogency Semiconductor, a competing developer of powerline integrated circuits, it seemed like a great time to get an update on the rationale for the acquisition. We recently had the opportunity to speak on the telephone with both Charlie Harris, Intellon's Chairman and CEO, and Ron Glibbery, now Intellon's President (whom we had met when he was Cogency's CEO). We wanted to hear not only why and how the assets were being combined, but also what plans Intellon has to make their chipsets and the products based on them much more successful in the marketplace.
Since our first tests of HomePlug two years ago, we've found the concept of networking home devices using the electrical wiring already in the walls to be very appealing. After all, someone is likely to ask you "Is it plugged in?" when something isn't working. Plugging a new device into a power outlet and having it become connected is intuitive. It has great coverage, because power outlets are already distributed all around a house--unlike the more limited number of telephone or coax connection points.
Of course, being intuitively right does not necessarily make a technology work well or win in the market.
When we ran our initial tests on HomePlug (http://www.broadbandhomecentral.com/bbhl/homeplug.html) in 2002, we verified that the products did indeed work and since that time, many improvements have made them work even better. Our tests of HomePlug products from ST&T built on both Intellon and Cogency chips showed that both worked very well.
What didn't seem to work well, however, was the effort of the HomePlug Powerline Alliance--the industry consortium formed to certify and promote HomePlug products--to get their message to the market. Wi-Fi had all the air time (no pun intended). Although Wi-Fi is a terrific solution for portable devices, the natural tendency of wireless to be subject to interference and "dead-spots" seemed to suggest HomePlug--which avoids these problems--as the natural complement for stationary devices.
In addition to facing the formidable task of competing for shelf space and mindshare with Wi-Fi, HomePlug faces the reality that wireless has moved more quickly toward higher speeds. 802.11g products are sweeping the market and the wireless push is now on toward 100 Mbps (http://www.broadbandhomecentral.com/report/backissues/Report0311_6.html), the new bar against which home networking is measured. More than a year ago, HomePlug announced the start of work on HomePlug AV, a new standard with the same goals.
With those thoughts in mind, we first asked Charlie and Ron to explain the "whys" of the acquisition. Charlie explained that both companies had reduced staff during the difficult period the market encountered. However, with work now gearing up on HomePlug AV, Intellon clearly needed to add more resources. With their goal being to have "the best high-speed powerline team in the world" it was a natural to combine forces with another competent but understaffed team, so that together they could "have the best technology and engineering teams". This was made possible since Intellon had gotten new financing (see "Funding" above). “With this acquisition, we have over 95% of the growing world market for HomePlug 1.0 integrated circuits. We intend to continue that leadership with our next-generation PowerAV™ integrated circuits that will support video streaming over existing home powerlines.”
With the engineering resources now integrated, Intellon's goal for IC chip samples for HomePlug AV is the end of this year; that depends on when the HomePlug AV spec is finally locked in. If all goes as expected, products should reach the market in the first half of 2005. Intellon's goal for their next-generation product is to support two "bulletproof" high-definition video streams, along with some Web surfing and VoIP.
The next stage for HomePlug chips is that they won't be just in adapters, but embedded directly into PC and CE products; that will be the step that really delivers on the whole intuitive, easy, ubiquitous promise. Learning from Intel's involvement in Wi-Fi, Intellon expects to be more active than before in direct market development.
Of course, Intellon is not alone in going after the market for HomePlug AV chips. Other contenders include Panasonic, Conexant and Barcelona-based DS2 (which has been more focused on the access market). Each of these has contributed some of the baseline technology, as announced by the HomePlug association at CES in January: "The HomePlug AV specification will be based upon Panasonic's innovative powerline AV communications technology, along with the proven market performance of Intellon's powerline home networking technology and DS2's powerline access technology. The baseline technology includes quality of service and AV management technology provided by Sharp. Conexant will contribute its advanced signal processing capabilities to improve overall system performance and robustness."
Whoever it is that delivers on the promise, we're eager to have what Oleg Logvinov, new President of the HomePlug alliance, says it will deliver: the "bandwidth to stream high definition video, the Quality-of-Service required for audio/visual applications and services, and reliable coverage of the entire house.”