(15 May 2006 6:00 pm)

MUMBAI: As the networked home market in the US reaches the mass-market adoption stage, multimedia and entertainment-centric networking solutions are likely to drive the demand for home networking and become strong revenue generators.

Moreover, increasing broadband penetration and expanding range of applications and services are ushering in new growth opportunities for all stakeholders in this nascent market.

Research firm Frost and Sullivan finds that spurred by the increase in multiple PC households, falling hardware prices, increasing number of IP applications and rise in broadband adoption; the number of networked homes in North America is likely to increase from 22.5 million in 2005 to 63.8 million in 2012.

Frost & Sullivan industry analyst Piyush Arora notes, "Entertainment-based home networks and emerging broadband services and applications such as IPTV and personal video recording are likely to be key contributors to future growth of home networking. The growth in network-enabled consumer electronic devices and the burgeoning online and offline digital content, will also fuel this trend."

Last year only five per cent of total networked homes had a multimedia network with at least one non-PC networked device such as a television, DVD player or set-top box. However, by 2012, multimedia networks are likely to post a stronger growth and increase their share to 25 per cent of total networked homes.

The increasing penetration of broadband is also expanding the range of potential applications of home networks -- from sharing broadband access between computers to streaming multimedia content between networked consumer electronic devices. Networked storage, home automation and home security are also likely to become strong contributors to home networking growth.

Furthermore, networked homes will be ideal for service providers to deliver triple-play services and other service bundles to attract new customers. In fact, service providers are becoming an important component of the distribution channel for networking products and solutions.

Last year, around 15 per cent of total home networking equipment revenues in North America came from the service provider channel. This share is likely to increase to 37 per cent by 2012 as service providers -- including cable companies, telcos, and other broadband ISPs -- increase their service bundling initiatives and start playing a more active role in offering home networking solutions.

In the long term, it is essential for service providers, networking equipment vendors, and other stakeholders to forge more effective partnerships and develop networking solutions that provide a simpler set-up experience for consumers and reduce ongoing maintenance issues.

"Given the complexity of setup, installation, and troubleshooting, developing a more lucid support management framework and new customer support tools are crucial for the widespread adoption of home networks," concludes Arora.