Home Networking Markets Awaiting Growth

Enormous interest in home connectivity from nearly every technology industry will cause the worldwide home networking equipment and residential gateway market to grow from more than $600 million in 2000 to more than $5.7 billion by 2004, according to Cahners In-Stat Group.

“From a market that a couple of years ago was seen as only a small niche to be served by networking equipment companies, today we see every company in the consumer electronics and PC industries, as well as the service provider space, developing products and strategies for the connected home,” said Mike Wolf, senior analyst for Cahners In-Stat Group. “All aspects of this connected home — communications, entertainment, and home systems management — will be interconnected in the future using networking and Internet technology.”

According to Cahners, the exciting future that awaits this market will take time to develop. The home networking market currently will move from the current first-generation products, such as basic PC adapter cards and simple gateways, to a future where connectivity technology is embedded in recognizable devices that non-technical users are familiar and comfortable with.

“The home connectivity market will not reach critical mass until consumers are shown that this technology is simple and adds value to their lives,” Wolf said. “This will take time and education, and there will be a few hiccups along the way.”

New connectivity-based services, enabled through home networking technology, will help drive growth in this market, Cahners found. Additional voice lines, home management and monitoring, as well as new value-added entertainment services will create a $3 billion connectivity services market by 2004.

Cahners report “The Connected Home: The Emerging Market for Home Networking Technology and Services” includes five-year forecasts by region for home networking and residential gateway equipment.