Interview with NetGear CEO

Patrick Lo talks at News.com about the coming wave of WiFi integration into consumer electronic devices like MP3 players, TVs, etc. and predicts that there will be a big "retrofit" market for adding WiFi interfaces to legacy devices:

But again, there's a huge retrofit market. You could retrofit back for digital devices, such as gaming consoles, TVs and ordinary radios, using a digital media adapter so you can retrofit the old analog devices to connect to the Internet. We believe that will become big next year.

In discussing hotspot business models, he makes the interesting analogy between hotspot models today and the early days of ATMs:

I like to compare them to ATMs. People said, "Why should I pay to get my own money?" It was ridiculous, and the banks, 20 years ago, realized you just can't be competitive without ATM service. So over the years banks changed their views on ATMs. They were free, and then they charged for them, and then they were free again.

Now banks look at ATMs as a necessary customer-enhancing service to attract and retain customers, while other people are willing to spend $20,000 to $30,000 for a machine so they can to stick it in a grocery store and make a killing on charging fees. The industry found equilibrium, where ATMs would be a customer retention tool for some, while in other places people charged.

Another similar analogy I've heard is to parking spots - you go to a restaurant and you might spend say 15 minutes hunting for a free parking spot. Or, if you're in a hurry or want to avoid the headache, you might just pay for valet parking. The idea being that for-fee and for-free models will coexist.

(Link to the interview via Emergic.org)