January 1, 2000
HousingZone

Ultra-fast Internet. Sophisticated high-definition digital home theaters. Automated home energy management. There’s an explosion of unique home systems, not just for owners of luxury homes, but also for Jack and Jane Average’s moderately-priced home. But there’s a catch.

Most newly-built homes lack the wiring to support such computer, communications and entertainment systems that families are embracing. As techies say: the in-house pipe is too small and slow for the "connected home."

"The standard new home today features a wiring package designed 50 years ago," observes Mark Schmidt, with IBM Home Networking. "How do you tell someone who just purchased a new home that it’s not built to accommodate off-the-shelf home entertainment systems, or that their children will have limited access to the wide range of educational opportunities available on the Internet?"

For builders, a solution is in the home’s wiring, with a new approach called structured wiring. Computer and communications firms are educating consumers to demand it. Late last year, IBM, along with Intel Corporation, Lucent Technologies and twelve others, kicked off a Wiring Americas’ Homes consumer campaign as much aimed at builders as homebuyers. Managed by the Home Automation Association, the campaign boasts basic wiring standards that give builders and consumers a checklist to determine if their new home is being built to accommodate the latest in communications, entertainment and security technologies.

Some builders have already championed next generation in-home wiring. The market for residential structured cabling systems has grown steadily since 1992 when professional installations first appeared, most often aiming at high-end custom homes.

But as production builders and developers embrace such concepts as structured wiring, installations have grown from 34,500 housing units in 1998 to more than 113,000 housing units last year, according to Allied Business Intelligence, Inc. (ABI), an Oyster Bay, NY-based technology research think-tank. By 2004, builders will construct about 800,000 new homes with structured wiring, suggests ABI.

At its basics, structured wiring systems let homeowners control two or more high-tech systems, such as computers, entertainment and security systems, lighting, utilities and environmental controls. Structured wiring consists of high-performance cables and other wiring connected to a central distribution hub. For instance, Wiring Americas’ Homes recommends an approach with multimedia outlets with connections for multiple phonelines over a high-speed Cat 5 cable, entertainment options over two high quality RG6 quad shielded coax cables and data access over a separate Cat 5 cable.

"Structured wiring is one of the fastest growing construction products in the country, and we are not talking about a small niche of home automation techies," says Cynthia Pawlowski, with Lucent Technologies. "This is a high-volume, mainstream phenomenon that is happening right now. Multi-unit property owners are already successfully using built-in Internet access to lure residents, and we believe single-family builders will quickly see the value of structured wiring as a competitive marketing advantage."

ABI says the total home automation and networking market will hit $7.7 billion in revenue by 2004. It reports that total revenues from residential structured wiring installations have tripled from $69.5 million in 1998 to $207.9 million last year. Another research firm, Parks Associates of Dallas, Tex., predicts sales of structured wiring systems to single- and multi-family homes could top $537 million in four years. ABI, seeing a more aggressive market, pegs revenues at $1.7 billion by 2004.

No matter the size of the market, some large tech firms as well as a collection of small and emerging firms are involved. Among the most established sources for structured wiring systems: the OnQ system from OnQ Technologies; HomeStar wiring system by Lucent Technologies, Warren, N.J.; IBM’s Home Director network, IBM Corp., Armonk, N.Y.; the QuickPort system marketed by Leviton Telcom, Bothell, Wash.; the InHouse system by Ortronics, Inc., Pawcatuck, Conn.; and the Siemon Home Cabling, Siemon Co., Watertown, Conn. Others include USTec, Greyfox Systems, ChannelPlus from Multiplex Technology, Inc., of Brea, Calif., and the Sprint Structured Wiring System from Sprint Products Group and Sprint North Supply.

Builders can purchase structured wiring network packages directly or through emerging home systems architects, a low-voltage equipment distributor, or through an electrical contractor, home systems professional or home security dealer/installer firm. Packages include wiring (coax, twisted pair, fiber optic) and distribution hubs and panels. National builders such as Centex and Shey Homes have structured wiring as a standard feature or an option; smaller builders also are in the action, on their own or in installation partnerships. For builders, one thing can lead to another: a structured wiring backbone can easily lead to homeowner-targeted value-added service packages in conjunction with technology partners.

While there is no one killer application, structured wiring is a gateway to a range of advances that consumers find appealing, to various degrees. These include multiple phone lines, Ethernet LAN ports in every room, fully-featured home offices, controls for lights and thermostats, shared Internet access across multiple home computers, video feeds for viewing movies on multiple displays and multimedia, interactive security monitoring at the front door or baby’s bedroom.

Structured wiring is by no means the only in-home pipe. Competing are so-called "no new wires" approaches ranging from phoneline and powerline to wireless. Each has its advantages and disadvantages regarding data speed, ability to carry large amounts of data (video, for example), interference and compatibility. However, structured wiring has inherent appeal to the builder looking for a cost-effective means to build-in the future. A structured wiring system typically adds $750 and $2,000 to the cost of a new home, with larger homes or more complex home systems architectural plans commanding higher prices.
© 2009, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.