Home Is Where The Network Is

By Robyn Greenspan

September 05, 2003

Broadband sharing will spark the interest, and multimedia will close the deal on home networking adoption, with wireless overtaking wired by 2004.

Spurred by compelling applications, interactive devices, dropping hardware prices, and easier installations, home networking is expected to penetrate 27 percent of U.S. households by 2008. Jupiter Research (a unit of this site's corporate parent) finds 31 million American PC-centric households will be created by 2008, with wireless taking the lead by 2004, and In-Stat/MDR predicts the global market to grow from $1.8 billion in 2002 to $5.3 billion in 2007.

U.S. Home Networks
(in millions)
  Wired Wireless
2002 6.1 1.7
2003 6.5 4.5
2004 6.2 8.7
2005 5.7 13.7
2006 4.9 19.1
2007 4.1 24.0
2008 3.4 28.2
Source: Jupiter Research

Research points to broadband sharing and multiple PCs as drivers of initial home networking adoption, while entertainment and media-centric applications generate interest among the mainstream.

Joseph Laszlo, senior analyst at Jupiter Research, expects home network adoption to occur in phases: "... there seems like there's an initial round of networking adoption associated with early adopters, PC-centric applications, and basically the home LAN as the value proposition. It may be that as connected consoles grow more common, and other media devices become Wi-Fi (or other network) capable, Europe and Asia may go straight to those media-centric types of network."

Laszlo notes that "It's in the transition from early adopter to mainstream adoption of home networking that the media side of the equation really becomes important."

The media side is expected to surge in the coming years. In-Stat/MDR predicts media networking to account for 49 percent of the revenues for total home networking by the end of 2007 — up from just 6 percent in 2002.

Parks Associates found that two-thirds of the 10,500 Internet households that were surveyed created a network to share an Internet connection, and more than one-third (34 percent) of the respondents to a Jupiter/Ipsos-NPD survey indicated that listening to PC music files on their home stereo was their primary interest, followed by home automation (33 percent), and viewing PC video on TV (31 percent).

"Current home network users — consumers who already have data networks for PC connectivity — will constitute a significant portion of the early market for multimedia networks," commented Tricia Parks, president of Parks Associates.

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