Dec 29, 2003 (08:12 AM EST)
Study: Home Networking Market Ripe For Change

Read the Original Article at InformationWeek

The growing trend of home networking--and the reasons why users are assembling such networks--puts PC makers such as Dell and Hewlett-Packard in the catbird's seat, according to a survey released Monday by the NPD Group. But as home networking expands from handling basic PC-centric chores such as file sharing, those vendors may not be the ones that end up with the bulk of the market, NPD's study concluded.

The survey, which was conducted in October and November, ranked Dell and HP rank as the top two preferred suppliers of home networking gear by those who have both already installed a network and those who plan to.

In all, 49% of the nearly 10,000 respondents to NPD's poll who have created a home network cited Dell as a leader in the field, while 44% named HP. Those who haven't implemented a home network think even more highly of Dell; 57% cited the computer maker as a premier supplier of home-networking hardware.

"Given that most of what consumers do with home networks today are PC centric tasks, it's not surprising that most consumers said they would turn to PC companies to supply their networking gear," Stephen Baker, the NPD Group's director of industry analysis, said in a statement.

Although the survey found that most consumers with a home network have rolled out one based on Ethernet, wireless is gaining ground, said NPD, due to the popularity of notebooks in the home and the look-no-cable advantage of wireless.

Through the first 10 months of 2003, sales of wireless networking hardware for the home grew 120%, NPD Group estimated, and accounted for more than half of all revenue generated by consumer networking products.

But the future of home networking may be a rougher road as consumers' expectations meet the wall of real-world functionality--and PC giants like Dell and HP then could be caught flat-footed.

"The question for the future is how consumers will view these providers when the uses begin to involve more extensive inclusion of home entertainment gear," Baker said.

With users demanding to share media files and stream video among a plethora of devices that include PCs, televisions, digital video recorders, and satellite services, today's leading suppliers of home networking gear must step up their offerings in the new year or risk disappointing customers.

"The reality of today's home networking falls far short of what the networked home of the future will look like," Baker said.