The demand for home networks is growing, but vendors and carriers remain largely oblivious to this opportunity, believes technology research firm Ovum. Such a failure could prevent the home network market from achieving its full potential, and set back the dream of converged broadcast entertainment and interactive online services by many years, it noted in a statement. Part of the reason for this is a misunderstanding of what home networking means, said Ovum principal analyst Iain Stevenson. According to him, when home networks first started, "people got very carried away with 'houses of the future' concepts such as home automation and intelligent fridges, when other less glamorous developments are where the real market opportunities lie." "The lesson for telcos and other vendors vying for space in this market is to keep products simple and...useful for non-technical, mainstream people wanting networked information and entertainment in their homes," Stevenson added. Home networks are currently being used in three main areas: connectivity, entertainment and automation. However, demand for Internet access and entertainment services are the primary forces that are driving the home networking business. Home automation remains a specialist application outside the large US market, which has 41.8 million home network bases. Going forward, therefore, the main global convergence opportunity is between connectivity and entertainment. "The first home networks will integrate PCs within the home and also provide external Internet connectivity," said the release. More user-friendly network products are also developing to meet demand for products and services with greater interoperability and ease of use. Software that makes for easier integration of network components is also being developed, and new network technologies like IEEE 802.11b and HomePlug mean users need no longer install special cabling. "Some of the best opportunities for vendors and operators wanting to win market share can be found in simple solutions such as: home network kits (adapter cards and gateways); improved Internet gateway devices (ie offering filtering for viruses, spam and porn); and value-added broadband Internet solutions," advised Stevenson. One obstacle to the blossoming of home networking is that data networks to and within the home are provided by different players from those providing broadcast entertainment services and home entertainment products. "It is only with the rise of the Internet that the need for convergence has strengthened, and even now broadcasters are wary of loss of content revenues to interactive fixed network services," said Stevenson. "Although telcos and vendors will continue in the short to medium term to offer products that don't facilitate interaction between PCs and home entertainment devices, they will soon develop bridging technologies to ensure increasing convergence between PCs, home cinema and digital video recorders." At the technical level, network convergence can be moved along by making the Home Audio Video interoperability specification -- for the interconnection of home cinema, TV and video equipment -- interoperate with home PC networks. Set-top boxes should be developed in consultation with data network vendors and carriers so as to integrate TV and Internet content. At a business level, broadcasters and content owners must complement their broadcast services with interactive Internet content. Ovum predicts that from 2001 to 2004, most home networking solutions will be separate products and systems. However, it sees growing convergence of home data and entertainment networks after that. For the latest home networking product news, plus a full explanation of what home networking is all about, what you need to get started, and how to put it all together, see ZDNet UK's Home Networking News Section. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forum. Let the editors know what you think in the Mailroom. And read other letters.