Cisco CEO: Consumers drive 'net

Consumers will drive the growth and direction of the Internet -- and consumer electronics companies need to help them navigate, John Chambers, president and chief executive officer of Cisco Systems, said in a keynote speech here on Friday.

The speech capped off Cisco's announcement yesterday of its first concerted push into consumer markets. The company, which supplies networking equipment underlying about 80 per cent of the Internet, said it will set up a consumer business division that will develop products and technologies for networks to - and within - homes.

In the next two to three years, Chambers said, a plethora of home appliances will be connected to the Internet -- including security systems, computers and even electric fireplaces -- allowing people to easily manage appliances in their homes even when they are absent.

"You might say, 'Cisco is a networking company; what do you know about consumer electronics?'" Chambers asked rhetorically. This was the first time the Cisco chief has spoken at CES (Consumer Electronics Show), a meeting that has traditionally attracted consumer electronics makers and dealers.

Describing Cisco as an Internet company, Chambers spent much of his keynote on the growing importance of the global network and the opportunities it opens for electronics vendors.

While businesses both big and small helped transform the Internet from a research tool to a popular communications medium, "the consumers will drive the second phase of the Internet revolution," Chambers said. "I do not think it's too simplistic to describe it as a true revolution."

With backing from industry giants like Microsoft and Sony, who also espoused visions of a Net-connected future here this week, Chambers' plan is on track to become a reality, industry pundits here said.

"We saw the same message from Microsoft and Sony yesterday. That's three big companies right there saying this will happen, and that's a lot of momentum to keep things moving forward," said Mike Ward, vice president of business development with consulting firm Spectra.

Like others in the audience, however, Ward said it may be closer to a decade before Chambers' vision filters down into the lives of everyday consumers.

Chambers touched on the usual metrics used to explain the Internet revolution including the surge in online sales last December and the breakneck growth of companies like online bookseller Amazon.com. He pointed out that a recently released prediction that electronic commerce sales will reach $US1.1 trillion in 2002 far surpasses market researchers' projections just a few years ago.

For attendees of CES that number has meaning: "[The Internet] literally allows us to sell a lot more products, services and support in ways not thought of before," he said. "Let your mind go in terms of what this technology can really mean in terms of devices."

To demonstrate, Chambers used a mock living room with all of its appliances and electric infrastructure wired to a network running on the Internet protocol. Pretending to be at the office, Chambers and a helper used a Web browser to control the room's heating, lighting and even electronic musical instruments.

Chambers used a browser setting that integrated all of the controls under a category labeled "Ambiance." When set to "Romantic Evening" the room's lights dimmed, shades closed at the same time that a piano and violin began playing music and the fireplace was lit.

Chambers predicted that networked devices would extend to microwave ovens and that everyone will some day have five Internet devices on their bodies.

"It's not just going to be a telephone or a PC or a pager on your body, or a global positioning system," he said. "It will also be device [that] can monitor key issues," like a heart monitor that can automatically alert a doctor when the patient has a problem.

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