By the end of 2002, Microsoft will release a line of hardware and software products designed to make it easier for consumers to set up wireless home networks. The initiative could increase the number of PCs in consumers' homes, spur sales of wireless-enabled products, such as Tablet PC and Windows Powered Smart Displays (code-named Mira), and aid Microsoft's plans to make the PC a hub for digital entertainment in the home. However, the new products will not spur adoption of wireless home networking unless other product groups, such as Windows and MSN, understand the initiative's strategic importance and update their products accordingly.

Likely Product: PC Adapter

Microsoft gave no details about the planned products, but only said they will support the Wi-Fi standard for wireless home networking. Among other things, this means they will use the 802.11b wireless data transfer protocol, which offers transfer speeds up to 11Mbps.

Microsoft said its main goal is to make home wireless networking easier for consumers to set up and maintain. Thus, the product line will probably include hardware that lets a Windows XP PC act as the hub for a wireless home network, and it might not include a separate wireless router like those that other companies (such as Netgear and Linksys) offer, for two reasons:

Ease of use. With PC-based hardware, users could use their existing broadband connection and add new devices to the network through a wizard or other simple software interface; Windows XP's built-in firewall could be used to secure the network. With a separate router, users have one more device to manage and troubleshoot, and must configure all their other network devices to work with it.

Cost and availability. Wireless home routers retail for more than US$100, and users must normally purchase them separately from their PC, as well as buying a network interface card if their PC doesn't already have one. PC-based hardware would probably be less expensive to manufacture, and Microsoft could work with OEMs to bundle it with new PCs.

Goal: Sell More PCs, Devices

Making wireless home networks easier and cheaper would help Microsoft achieve the following goals:

Sell more PCs per home. Multiple PCs are much more useful if they're connected to a network and can share files and resources (such as printers). But most consumers are unwilling to run cable through their house, and other alternatives, such as networks that run over existing phone lines or power lines in the home, are not widely supported. By making wireless networks cheap and easy to use, Microsoft could encourage more home users to buy multiple PCs.

Sell other wireless-enabled devices. 802.11b support is part of Microsoft's design specifications for the Tablet PC and the Windows Powered Smart Display (a CE-based portable display, formerly code-named Mira, that will wirelessly connect to a home PC). Consumers are unlikely to buy these or other wireless devices running Microsoft software unless they can quickly and easily set up a wireless network at home.

Establish the PC as an entertainment hub. Microsoft's long-term consumer strategy is driven by a vision of the PC as a hub for digital entertainment in the home—users will record, download, and edit digital media on their PC, then distribute it to other devices, such as home stereos and TV sets. This will spur consumers to buy new PCs with bigger hard drives and more sophisticated digital media applications, as well as consumer electronics devices that support Microsoft technologies (such as the Windows Media Format). However, this vision will not happen as long as users find it difficult to connect these devices on a home network.

Home Wireless Strategy Not Yet Clear

The new product line is being developed by Microsoft's hardware division, which currently creates other products such as mice and keyboards. However, this group's efforts alone will not be sufficient to spur consumers to adopt wireless home networks.

For example, MSN Broadband, the company's high-bandwidth ISP, does not currently offer technical support for broadband customers who are simultaneously connected to a home networks. This puts two major Microsoft initiatives—expanded broadband use and promoting home networks—at odds. Another example: although Windows Powered Wireless Displays are supposed to be a consumer product, they will not connect to PCs running Windows XP Home—only the more expensive Windows XP Professional.

If Microsoft truly wants to promote wireless home networks, it must adopt a consistent companywide strategy, and make sure this strategy is understood and supported by product groups throughout the entire company.