NetGear CEO On His Entertainer HD Box (and Why It's Better than Apple's)

| About: NETGEAR, Inc. (NTGR)

NetGear (NASDAQ:NTGR) made a pretty big splash at this year’s Consumer Electronics Show, holding a big pre-show press conference at the Venetian alongside the likes of Sony, LG and Samsung. As I noted last weekend, the company announced several products, include a dual-mode cordless phone that supports Skype. But it’s big launch was its digital media adapter, a product it calls the Digital Entertainer HD, which is designed to route digital media content from wherever it is stored in your house to whatever screens you want to display it on.

The box can handle both digital music and high-def video, and includes selected content from the Web, including YouTube and a selection of Internet radio stations. If you have a PC with a TV card, you can also use it as for digital video recording, with the programming residing on your PC. (It has no storage of its own.)

At the time of the announcement, with the Steve Jobs keynote still two days away, the company declined to compare its device to Apple’s (NASDAQ:AAPL) iTV AppleTV box, which has some similar functionality. But by Wednesday, when I sat down to talk to NetGear CEO Patrick Lo, the Apple news was out. And that made the device fair game.

You will not be surprised to learn that Lo thinks his $349 Home Entertainer HD box is a lot better than the $299 Apple TV box.

“It’s a very different box,” Lo told me, while we say in a tiny conference room in NetGear’s booth in the South Hall of the Las Vegas Convention Center, a couple of tall unicycles weirdly sitting on the ground just outside the room’s flimsy door. “Apple’s box is very Apple-ish. They don’t support the Windows environment. We support Windows DRM. Resolution is full 1080p for us, only 720p for them. We support DVR functionality. We support “follow me” mode [which allows you to start watching something in one room, than finish in another.] We are higher end, and more broad based. There’s is more an Apple-only set-top box. At Macworld, he spent 90% of his time on the iPhone. He knows he has an inferior product.”

That said, Lo had some kind words for the iPhone.

“The phone is a tremendous breakthrough in user interfaces. Everybody is griping, why does it not support 3G; but he is way ahead of 3G. It will support wi-fi. Everythiing is going to be through IP. It makes a statement. Voice transmitted over VoIP. Mesh wi-fi networks are coming all over. It bodes well for all VoIP products.”

I asked Lo whether consumers were going to be able to handle to complicated networking involved in setting up the new Netgear box. He says the company is aware of those concerns, and will partner with Best Buy’s (NYSE:BBY) Geek Squad and similar installation services at other consumer electronics retailers.

NetGear, of course, is better known as a networking equipment company, makes routers, hubs and other gear for both consumers and businesses. The company’s traditional networking products are still 85% of its revenue, Lo says, with 15% from newer products like media adapters and phones; he says the “new stuff” could be 30%-35% of the total three years from now.

Lo declined to give any forecast on how the company might perform in 2007. Lo notes that he previously forecast guidance for 2006 of 25%-28% growth; he did say that the home and small-business networking market in 2007 should growth at comparable rates as in 2006, and he expects the company to continue to take market share. Lo says the company will report results in mid-February.