"... Whether or not computer, software, consumer-electronics, telecoms, cable and internet companies are in fact out of touch with consumers may be the biggest question facing these industries today. That is because the “digital home”, a concept and category hugely hyped in executive circles but still rarely heard in discussions among consumers, represents their greatest hope for revenue growth. Demand from corporate buyers of technology has barely recovered from the dotcom bust and is widely expected to be unimpressive for years. By contrast, the homes of consumers appear to technology vendors as a barely tamed analogue wilderness. Darcy Travlos, an analyst at CreditSights, a research firm, estimates the market opportunity of the digital home at $250 billion in America alone and $1 trillion worldwide in three to seven years. ... ... All this points to a huge problem with the digital-home vision: the lack, among most consumers, of any sense of crisis about the status quo in entertainment. “We don't think many folks are looking for an electronic nerve centre in their homes,” says Pip Coburn, who runs Coburn Ventures, a technology-consulting and investment firm. After all, popping in a DVD, say, is so easy and works so well. By contrast, getting a digital home up and running promises several lost weekends of fiddling with manuals and settings, and hefty expenses in new gear. According to Mr Coburn's formula for evaluating new technologies, whereby adoption is a function of the users' sense of crisis (ie, motivation to change) outweighing their perceived pain of switching, the digital home ranks as a clear 'loser'. ..." The Economist.
Added 8 Sep. 2005: Umair vs The Economist. Umair Haque writes: "I have a lot of respect for the Economist guys, but sometimes they really get tech wrong. Case in point, the latest article about the digital home. The argument (it's hard to follow) is essentially that consumers don't value the digital home, but incumbents do, so they'll try it, and it will be a big, costly error. ¶ I think this is a specious argument. Let's take a bigger picture look at what's happening in this space. ..." Link: Bubble Generation weblog.