Residential Gateway Market Awaits Explosive Growth

Bringing Internet connectivity throughout the household will allow the emerging market for Residential Gateway (RG) hardware to reach $4.7 billion worldwide by 2005, according to a report by Allied Business Intelligence (ABI).

The RG is an intelligent hardware device connecting home devices and appliances to the Internet, and may also incorporate the network access interface. In many cases these devices will be primarily marketed as access devices with integrated home networking functionality. These all-in-one boxes will allow service providers, the initial target market, to deliver multiple services by deploying a single box on the customer premises.

“The rollout of broadband access devices will allow service providers to deliver integrated services such as data, video, and voice to the home,” said ABI senior analyst Navin Sabharwal, the author of ABI’s report “Residential Gateways: Enabling Services into the Home.”

North America is expected to be the leading market for RG deployment because of higher multiple PC penetration into the home and greater penetration of non-PC Internet appliances. This market will account for a 59 percent annual increase in units shipped from 2002 to 2005. The distribution of services within a home can enable service providers to increase revenues per subscriber.

A number of broadband OEM companies are partnering with home networking technology ingredient vendors to provide an integrated broadband delivery RG, and some have founded the Open Services Gateway Initiative (OSGi) to specify standards for delivery of services for the gateways.

In other regions, utility-centric service gateways will be deployed aggressively, according to ABI’s report. Europe, for example, will realize a 64 percent annual increase in these shipments from 2002 to 2005. In these markets, RGs will be driven by deregulated utilities seeking to provision automated meter reading, security monitoring, and remote appliance management.