MARKET RESEARCH.

Home Networking Market Explodes As Products Become Faster, Easier To Use

Once thought of as a novelty for computing hobbyists and "techno gurus," the concept of home networking has developed into a lucrative and expanding market, promising aggressive growth well beyond 2005. According to Frost & Sullivan's latest study, US Home Networking Markets, the market generated $37.9 million in the first two quarters of 1999 -- a dramatic increase over the 1998 total of $34.5 million. New end-user groups include less technically savvy consumers who desire plug-and-play products.

As more PC OEMs begin including home networking capabilities in their products, "partnering with these PC OEMs provides strong opportunities for vendors," the study says. In fact, "any vendor could easily slingshot as a leader in the market with the right strategic partnerships," says F&S analyst Brian Palmer.

Although Ethernet has historically dominated the market, the new wave of networking technologies is easier to use and requires no additional wiring. "Some vendors are rushing to offer home kits that deliver data, voice and video traffic over the existing wiring infrastructure in the home, while others are devising systems requiring no physical connection between networked nodes," Palmer says. "The exciting new applications of home networking will be the 'No New Wires' alternatives, such as power, phone, and wireless."

According to the report, competition will intensify as the home networking market progresses through the developmental stage of its life cycle. Several new companies have entered the market, and the passage of new standards in the industry has signaled a rise in awareness and indicates that this market is ready for mass adoption. "However, vendors who deliver plug-and-play features and aggressive PC OEMs campaigns will likely prevail," the study says.

Investments In Infrastructure Will Help I-Economy Reach $2.8 Trillion By 2003

The worldwide Internet economy will soar past the $1 trillion mark in 2001 and by 2003 it will be well on its way to a remarkable $3 trillion. According to a new report from International Data Corp. (IDC), the three key elements to the Internet economy -- Internet commerce, Internet IT infrastructure, and Internet business infrastructure -- are shifting in importance in terms of contributions to the Internet economy.

"In the early Internet economy years, investments focused around technology products and services to strengthen the infrastructure, achieve critical mass, and introduce online users to commerce," says Anna Giraldo Kerr, senior analyst for IDC's Internet and eCommerce Strategies research program. "Now, however, non-technology spending is slowly catching on. The marketing and sales functions, along with content creation, will take a lead role in enhancing the Internet experience and stimulating Internet commerce." Other key findings from IDC's report:

For every dollar of ecommerce revenue generated in 1998, 93 cents were directly invested in the Internet commerce infrastructure. IDC expects corporations to increase their investments significantly to improve this ratio by 2003.

Technology investments accounted for 52 percent of worldwide Internet spending. But in 1999, for the first time, IDC expects non-technology investments to surpass technology investments. By 2003, technology investments' share will have decreased to 39 percent.

"Building the infrastructure to support Internet commerce is not cheap," says Frank Gens, senior vice president of Internet research at IDC. "Everyone praises the benefits of Internet commerce, but few understand the size of the investment required, and fewer still understand that technology infrastructure is just a part of that investment."