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Value-Added Managed Home Network Services Critical in Pushing Home Networks beyond Early Adopters (5/8/2005)

New study from The Diffusion Group concludes managed home networking services could enliven mass market interest in home networking technology.

New research from The Diffusion Group, a leading connected consumer and new media research consultancy, suggests that tying home networking to value-added services could help home networks "cross the chasm" between early adopters and mainstream consumers. "Consumer Interest in Value-Added Home Network Services - Volume II," TDG's latest report on home networking and managed home network services, identifies numerous specific value-added services that could help service providers extend their revenue and profit reach "beyond the modem."

"Broadband service providers (BSPs) are in an ideal position to push home networking into broadband households," said Rachel Avery, analyst and author of TDG's latest report. "By emphasizing the value of network-enabled services instead of selling hardware, BSPs can leverage their unique position in the broadband value chain to push networking solutions and services into consumer homes."

TDG's research continues to suggest that demand among U.S. consumers for home networks is declining. In fact, less than 15% of non-networked broadband households are interested in purchasing a home network in the next 12 months. While home networking continues to enjoy strong demand (especially among wireless solutions), the data suggests that without significant push efforts - either by the outreach of broadband service providers or massive digital home marketing campaigns on the part of leaders such as Intel or Microsoft - demand will begin to soften.

"While broadband service has become a relatively simple proposition for most households, the same cannot be said for home networking," said Avery. "The perception of complexity is still very real, despite notable improvements in the ease of set-up and use. But mass-market consumers want to know that installing and using a home network will be a hassle-free experience, and that if something goes wrong, they have the support to address their problems. Their interest in many value-added home networking services reflects that concern."

"Consumer Interest in Value-Added Home Network Services - Volume II" examines consumer interest in a number of specific managed home networking services, including:

* Whole-home networking protection; * Network alert services; * Plug-and-play services; * Remote network access; * Automatic software and firmware updates; * Automatic anti-virus and anti-spyware upgrades; * Virus and spyware alerts; * Parental control services; and * Home network diagnostic and repair services.

"Consumer Interest in Value-Added Home Network Services - Volume II" also offers insight into consumer price sensitivity regarding these managed network services both (1) in general, (2) at $5 per month, and (3) when bundled together at various price points. The report also identifies key market segments for home networks and managed home network services and offers strategic recommendations regarding the structure and price of potential service offerings.

www.tdgresearch.com