Bandwidth Wars: YANKEE GROUP PREDICTS NEARLY 10 MILLION U.S. HOMES
WILL BE Digitally Remodeled By Home Networking During the Next Four Years
- The Industry's Top Analysts and Executives Gather in Santa Clara to
Explain How the Digital Home is Finally Moving From Blueprint to Reality -
SANTA CLARA, Calif., Oct. 19 /PRNewswire/ -- According to research presented today by the Yankee
Group at its Networked Home Symposium in Santa Clara, as many as 10 million U.S. homes will undergo
digital remodeling by 2003, ushering in the era of the networked home. At the industry's most
comprehensive forum on home networking, the Yankee Group and top executives from leading companies
such as 3Com, Lucent, Microsoft, Motorola, Sony, and Sun Microsystems explained why the digital home
is starting to move from blueprint to construction. ( Photo:
newscom.com ) "The networked home is the point of
digital convergence; the place where consumers are realizing the benefits of appealing new applications and
content," said Boyd Peterson, vice president of the Yankee Group. "Today, this means consumers can
access the Internet from anywhere in their homes; but soon familiar products like telephones, stereos and
televisions will take on a whole new life."
Currently, about 650,000 U.S. homes have some form of networking installed. The Yankee Group projects
that number will jump to 10 million by 2003, reflecting a compounded annual growth rate of 95 percent
over the next four years.
The Market is Ready
Consumers are ready for the digital home, according to Yankee Group's 1999 Networked Home Survey -
the most comprehensive data available on consumer behaviors, preferences and adoption of home
networking technology. In fact, the survey showed that more than 17 million U.S. households are already
interested in home networking. "The networked digital home is becoming a reality now because we finally
have compelling applications, affordable, unobtrusive networking technology, and consumer demand,"
added Peterson.
The Yankee Group also believes the rapid growth of high-speed broadband Internet access services will
serve as a critical catalyst to the explosive growth of home networking. According to Yankee Group
analysts, broadband Internet brings with it the need to share access among multiple PCs and to deliver
Internet and multimedia content to many different devices and locations within the home. This generates
instant demand for home networking solutions. The proliferation of new web appliances like MP3
recorders, and the promise of digital television and IP (Internet Protocol) telephony services delivered
over the same networks will further increase the demand for home networking solutions. "1999 has been a
watershed year for the home networking industry," said Karuna Uppal, a senior analyst at Yankee Group.
"Advancements in home networking standards and product availability have moved home networking
technology from the laboratory to the living room."
Panelists and keynote speakers at the symposium also discussed the impact of the entrance of traditional
corporate networking players into the home environment. "Last month's retail introduction of our first
home networking products marked the first time Ethernet products were developed exclusively for home
use," said Eric Benhamou, CEO of 3Com Corporation, a keynote speaker at the symposium. "Serving as
architects for the digital remodeling of American homes is one of our largest growth opportunities as a
leading manufacturer of network solutions."
Making the Connection
At the symposium, panelists discussed the evolution of home networking devices and the many forms they
are taking. The Yankee Group believes the digital remodeling of U.S. homes will occur rapidly because many
of the newest options require minimal physical installation. In fact, much of this technology will simply be
embedded directly into familiar consumer devices like PCs and televisions. Of the almost 10 million homes
expected to have networking solutions by 2003, The Yankee Group predicts that the majority of these will
be employing PC-based networking.
More than 4 million PC-based homes will install phone line-based networking over existing wiring;
Nearly 1.5 million homes will use wireless networking technology; and About 300,000 homes will use
power line networking that works over existing electrical wiring.
By the end of 2003 Yankee Group also predicts the home networking market will be fueled by an estimated
5 million broadband homes that will have residential gateways installed - devices which route IP traffic
and provide data management and security. "Simple home networking solutions and new protocols that link
devices within the home will be at the heart of a technology evolution for consumers", says Craig Mundie,
senior vice president of Microsoft. "Home networks that run on existing wiring and new wireless links will
connect many types of digital devices in the home, providing them with a wide range of multimedia content
and services from the Internet."
The second Networked Home Symposium included presentations by the industry's top analysts from Yankee
Group's Consumer Market Convergence, Media and Entertainment Strategies, and Retail Energy planning
services. Keynote addresses also were given by leaders from some of the industry's top companies,
including: Eric Benhamou, CEO, 3COM Corp.; Michael Robertson, chairman and CEO, MP3.com; Bill Joy,
founder and chief scientist from Sun Microsystems; and Craig Mundie, senior vice president Microsoft
Corp. More information about the Yankee Group and home networking technology is available at
www.yankeegroup.com.
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