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Strategy Analytics: US Digital Home Market Will Be Transformed By IP-Enabled Devices (21/2/2006)

500 Percent Growth In 2005 and Installed Base of 330 Million IP-Enabled Devices Predicted by 2010

The connected home era has finally arrived, according to the latest research from Strategy Analytics. US sales of IP-enabled devices in 2005 rose by over 500 percent to 16 million units, as consumers rushed to buy IP-enabled games consoles, entertainment PCs and digital video recorders. This report, "Quantifying the Digital Home Opportunity," predicts that by 2010 US households will own more than 330 million IP-enabled devices that will be able to share and access music and video across home networks.

"Connected," or "IP-enabled," devices allow consumers to share content and entertainment applications across a home network. Major technology providers, such as Cisco/Linksys, Intel and Sony, are heavily promoting a new era of digital consumer electronics built around the connected home network. Early success stories include portable gaming devices from Sony and Nintendo, Microsoft's Xbox 360 and TiVo's latest DVRs.

Peter King, Connected Home Devices Service Director, said, "Consumer technology vendors who ignore the fundamental industry shift toward IP-enabled devices will be left behind. Our research finds that 7 percent of the digital consumer electronics market was IP-enabled in 2005, compared to only 1 percent in 2004. This trend will continue during 2006 as more and more manufacturers add connectivity to flat panel TVs, DVD players, digital cameras and cellphones. But technology vendors must analyze each market segment on its own merits: connectivity will penetrate some segments faster than others."

David Mercer, Digital Consumer Practice VP, adds, "The digital home industry will be transformed as new entrants embracing the connected home take share from established players. Successful vendors will focus on helping consumers overcome the complexities of installing and using networked entertainment devices."

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