With the digital home boom currently centred on devices such as digital cameras and MP3 players, IT resellers must look beyond directly competing with the purchasing power of the large retail chains in order to find a niche in the digital home market.
Computer resellers remain reluctant to embrace the opportunities presented by the digital home concept, Krieke says.
'There is still too great a focus on assembling and selling a box at the lowest cost level rather than value adding and selling the concept of the PC being the hub for home and portable entertainment.'
Resellers should be looking at market trends and trying to capitalise on them, he adds. 'For example, promote ground-breaking concepts such as images and video on the go and how simple these are to download and use when bundled with the PC that delivers the solution.'
The large retailers are devoting their floor space to promoting the concept of the digital home, and while they do this and demonstrate the concept, they will dominate this segment.'
This sentiment is echoed by Robert Wilkinson, Toshiba retail business manager, A/NZ, who points to opportunities to provide value-added service and consultation. 'We feel some resellers are nervous about the digital home - there has been lots of hype about the concept and resellers are holding back to see where the opportunity is.'
Higher margin products and the service revenue potential made it worth investigating, he says.
Wilkinson believes taking on the role of consultant and tailoring offerings to a particular purchaser's wants and current technology set-up (as opposed to off-the-shelf products as found in retailers), installation and 'try and buy' packages, could open up a niche for resellers.
'This maturity may not be far away. Currently smaller retailers and third party services organisations are testing this space with installation services for consumers,' he says.
With vendors highlighting the need for in-store experience to sell consumers on the possibilities of digital convergence, sales strategies such as Toshiba's kiosks in retailers such as David Jones, and HP's Home of the Future at Sydney's King Street Wharf, resellers also need to get in on the act, says Wilkinson. 'Touch and feel' is very important to consumers who are curious about what is available, he says.
Resellers would also need to invest in staff training, in-store demonstration models and the development of new service offerings to capitalise on the opportunity, he adds.
While retailers like Harvey Norman are catching up, IT resellers who have traditionally provided connectivity and networking solutions still have an opportunity to turn their hands to selling the latest video and audio technology for the home, says Optima's Ung.
'If technology developers like Cisco are able to provide good products and training, I think resellers can make inroads in future business.'
Products with potential
As with the ongoing boom in digital cameras and MP3 players, resellers can also look forward to some emerging technologies to provide other digital home opportunities this year.
Manufacturers including Samsung and Optima predict that displays will continue to be a hot technology this year. Optima launched a 42-inch standard definition plasma screen in December, and sold the whole first shipment of 800 units within a month, says Ung. The manufacturer also expects to start selling LCD TV products in June.
High definition (HD) plasma screens would rise over the next six months, according to Krieke. 'The market is moving away from standard definition screens to take advantage of HD broadcasts and digital images,' he says.
TFT-LCD monitors were still hot, he says. The faster refresh times - as low as four milliseconds - would make them ideal for moving images and gaming, Krieke says.
One manufacturer hoping to take advantage of the emerging market in pay-per-view television is KiSS, which has a relationship with major Danish television station TV2 to supply set-top boxes.
KiSS' DP-558 hard disk recorder provides an easy-to-use interface for using online electronic program guides, such as that provided by yourtv.com.au, Salamanca claims. 'It can be programmed to record from the user's PC or mobile phone.'
Low broadband take-up has held back the market for online multimedia services and entertainment in Australia, but the price drops of last year, combined with the rise of the faster ADSL2/2+ standard, are set to improve this situation in 2005.
With a small number of ISPs, including national carrier iinet, already offering the higher speed ADSL through their own DSLAMs, Netgear's Jeff Fulton says broadband uptake will be boosted by the ratification of the ADSL2/2+ standard, which is expected mid year. 'There are many ISPs ready to offer it at that time.' Many networking manufacturers including Netgear are already selling ADLS2/2+ compatible products, he says.
'ADSL2+ is the one people will care about because the data rate is effectively doubled,' he says, while the potential end-user market will also grow as the range of ADSL2/2+ is greater.
Based on Netgear's discussion with its ISP customers - many of whom are rolling out their own DSLAMs to compete with Telstra - Fulton predicts the number of homes with DSL ports will double this year. 'There are something like one million DSLAM points already with another million to go this year,' he says.
While the sales of digital cameras and MP3 players have highlighted that the Australian consumer has a taste for the digital life, manufacturers and the channel continue to work together to fill in the missing pieces of the digital home puzzle.
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