Keeping it simple is the new mantra of cable modem vendors, manufacturers and cable operators as they prepare for the dawning of the modem installation age, and wrestle with the question du jour: Who's going to install these modems, and at what cost?
Their agendas may be different, but each of the principals involved in the manufacture and distribution of cable modems and services is certain of one thing: cable modem installation must be pain-free and brief, if the post-early adopters, or early majority, are going to buy, and install them.
And although progress has been made in reducing the installation time for cable modems, a trained technician still requires about 60 to 90 minutes to install a modem today, compared with two technicians needing two to three hours less than two years ago. For low-tech customers, however, install times usually go well beyond that.
"There's been a big leap in reducing installation time the past two years, but it still inhibits the scalability of the business," says Tom Cullen, vice president of Internet services for MediaOne. And with cable modems, scalability counts. Surveys show that most of the early adopters, or just five percent of the total market, have either purchased or leased their modems. The rest have shown varying degrees of puzzlement towards cable modems and the installation process. "Customers don't know if there's room in their PCs for a modem. So, we have created a 'system qualifier' to see if a system qualifies for service," Cullen says. "The more time we can shave off installation, the better business we'll have."
MediaOne, Cullen adds, is trial marketing a self-install program for "high-end" customers with "pretty good" results thus far. And, the company periodically offers a free install incentive. "Most of our modem customers are existing cable subscribers and can establish a credit relationship. We hope to beta test a program this year where customers buy from retail, plug in their modems, and don't speak to us at all. We want to eliminate truck rolls altogether."
Others, however, don't see that happening anytime soon. "Full self-installation is a ways off," says David Livengood, director of marketing and data products for Cox @Home, a branded version of @Home. "The modem itself is as simple as plugging in a phone. But people are less comfortable downloading software."
"Clearly, installation is a big hurdle," says William Markey, director of consumer marketing for 3Com. "We're seeing fewer average installs per hour, and that limits the number of customers per day. Installation is having a drag effect on penetration."
One of the solutions, Markey says, is to eliminate the NIC (Network Interface Card) and replace it with the USB DCC (Dongle Connector Cord), which 3Com will introduce in late first quarter of this year. "Why have the NIC? It requires a customer to open their PC. USB will help because you don't have to open up your PC. And most people don't know how to do that," Markey explains. According to most industry experts, however, the trade-off for installing USB is speed. "USB is simpler and easier, but at a slower pace," counters one industry executive.
The strategy, Markey continues, is to arrive at an "easy as analog" solution. Once the complexity is removed, the cable modem business should get a boost, Markey says. "We see significant traffic at retailers for people who don't want to install. And in the marketplace, installs are becoming the differentiation for many retailers."
A surprising number of consumers have enough technical savvy to install their own modems, insists Dean Gilbert, senior vice president and general manager of @Home. "There's not a lot of need for technical savvy today when consumers buy modems in retail stores, and when modems are built into set-top boxes. That's a world where you have to make them self-installable, and now it's much easier. But there's still a ways to go."
One way is for the cost of installation to drop below $50, Gilbert says. "The barrier of entry will come down once installation costs drop. And that elasticity exists today."
Expanding the installation issue to the retail market is inevitable, and necessary, says Tom Way, general manager of TCA Cable in College Station, Texas. "The public in general is not educated on modems and their technology. No one really understands what cable modems are. And many are afraid of them." Some aren't, however. TCA offers a Terayon modem, and doesn't do installs. Says Way: "We're not @Home or a Roadrunner. Terayon is a robust product, and customers do their own hook-ups with IP. They attach a cable or ethernet connection. It's that simple. And it's been a big plus for us. Less than 18 percent have reported problems hooking them up."
There is one caveat, however. College Station has a high percentage of college students, professors and members of academia who are familiar with computers and modems, which has spiked TCA's modem business to well above average numbers.
Most modem-related companies admit their future customers need technical help, including some form of operator/retailer assistance, if modems are to be self-installed. "Most homes don't have PCs where their cable outlets are," says Livengood. "So splitters and filters are needed. But we can do that. There's not too much to opening a computer case and doing the diagnostics, but I think that eventually we'll find the NIC card or USB being installed by the manufacturer."
Building simplicity into a modem is the goal of manufacturers such as General Instrument. Although with four modem entities all fighting for customers, and with constant software upgrades and hardware tweaks common with proprietary modems, that's turning out to be no easy task.
"What's complicating the issue is the cable ISP and data service providers, because they tend to add custom software to the computers," says Buddy Snow, director of product management for GI. "You can't allow customers to enter a store and deal with three or four skews in their modems. If we all fight to get modems in front of the consumer, we'll all lose," he predicts.
A key to simplifying the modem installation process, Snow says, is keeping the computer in one piece. "Anything we can do to not crack open a PC is important. So we've developed an adapter which will take either an ethernet or USB card."
The coming-DOCSIS modem standard will also be a huge gain for modem installers, Snow says. "Before DOCSIS, there were only proprietary modems. Now, we're making modems simpler, with (fewer) parts inside. In two years, everything in the modem will be comprised in two silicon chips, except the outside power supply."
GI's install strategy is to offer "over the wire" updates into customers' PCs without them even knowing it, Snow says, and to make at least two major revisions this year, a critical component to the company's modem installation road map. "Without the road map, we would fall behind in three vectors: cost reduction, the technology curve (USB) and the DOCSIS standard, which will be changing as well," he says.
At the end of the day, however, most industry experts predict that the companies who keep their modems simple, efficient, customer-friendly and serviceable will be the ultimate winners in the crucial early majority market.