Home Networking Market Surges

According to Cahners In-Stat Group research, which was released in April, the in-home networking equipment market showed strong growth in 2000, jumping by 97 percent in total sales to end the year at $290 million. The high-tech market research firm finds that this strong growth was driven by the surprising uptake of wireless home networking gear by end users.
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According to Cahners In-Stat Group research, which was released in April, the in-home networking equipment market showed strong growth in 2000, jumping by 97 percent in total sales to end the year at $290 million. The high-tech market research firm finds that this strong growth was driven by the surprising uptake of wireless home networking gear by end users.

"Wireless was the story of 2000 for the home networking industry. Both 802.11b and Home RF-based networking hardware saw brisk sales growth, quarter to quarter, with the fourth quarter of 2000 showing very impressive growth numbers," said Mike Wolf, director of Enterprise and Residential Communications at In-Stat. "Our research has shown that wireless is very intuitive to end-users, in that they embrace the benefits of wireless networking for such applications as broadband Internet sharing.

Both the wireless and phoneline markets had fierce competition among the different market participants in 2000. Agere Systems (formerly part of Lucent) saw its Orinoco wireless LAN product garner nearly 37 percent of annual wireless home networking end-use sales. Proxim totaled 25 percent of total wireless home networking revenues in 2000 on its lower priced Symphony product line. Intel dominated the phoneline home networking space with 53 percent of all connections. "While the wireless and phoneline have been the primary focus among the different media transport layers for home networking the past couple of years, many continue to underestimate the continued strength of good old Ethernet," Wolf said. "Because of its familiarity, field-tested reliability and low cost, Ethernet continues to see strong uptake in homes as consumers move to install low-cost PC to PC networks."

Cahners In-Stat expects the home networking market to continue to experience strong growth as vendors release second-generation products and wireless networking products continue to drop in price; consumers, beyond the early adopters, adopt broadband and begin to see the benefits of home connectivity; consumer ISPs such as AOL and Earthlink push new home network strategies; and after Windows XP for Consumers (with its strong focus on networking connectivity and broadband) is released in fourth quarter 2001 and drives a new PC sales cycle.

The report, "Are We Connected Yet?: 2000 Home Network Market Shares and 2001 Preview," is part of the Cahners In-Stat Group's industry leading Residential Connectivity Service.

To purchase this report, or for more information, contact Courtney McEuen at 480.609.4533; cmceuen@instat.com.

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