Strategy Analytics Forecasts Networks in 21% of Homes by 2005

Multiple home PCs and mobile phones will drive demand, say analysts.

Home networking could lead to a whole new generation of services and devices and the advent of the "intelligent home", according to a report released by Strategy Analytics (Boston, MA). The research firm estimates up to 21% of homes will adopt wired and wireless home networks by 2005.

These findings are presented within Strategy Analytics' strategic advisory service, "The Interactive Home", which provides the industry insights into key market and technology trends.

Three major home networking technology platforms currently exist—wired, powerline, and wireless. The report concludes that wired networks such as HomePNA will be used for content distribution within the home, while wireless technologies such as Bluetooth will offer enhanced device-to-device intelligence.

The home network market is industry-driven. Key players such as mobile phone, PC and consumer electronics companies all have an interest in creating demand for networking technologies, since they will support sales of new appliances and applications.

"Most consumers are not looking to buy home networks," says David Mercer, Director of Strategy Analytics' Interactive Home service. "Developers must present the benefits clearly, and make them completely foolproof to install and use."

The analysts predict that wireless network technologies will eventually become more widespread than today's wired devices. Driven initially by mobile communications companies, a wireless connectivity standard such as Bluetooth will rapidly penetrate portable devices such as handsets, smartphones and portable PCs. This will drive down costs and allow manufacturers of other consumer appliances such as set-top boxes to incorporate the technology cheaply.

In the US, by 2005, 19% of households will have wireless networks, and 77 million wireless devices will be connected. Nearly half of homes will have two or more PCs, 19% will have broadband Internet and 11% will have wired networks.

In Europe, 15% households will have wireless networks by 2005, and 88 million wireless devices will be installed. 36% of homes will have multiple PCs, 9% broadband Internet, and 4% wired networks.