Technology | Media | Telecommunications

Wednesday, April 15, 2009

Digital Home Networks are Still Too Complex

Growth for home networking products has been slowing in recent years, due to market saturation and price erosion. The decline is partly due to the current global economic slump -- and forecasts for core home networking device revenues indicate a declining market through 2014.

However, the network connected media device market segment continues to show growth. The result, according to a new market study from ABI Research, is that total revenues for network connected devices will rise from about $74 billion this year to over $94 billion in 2010.

"Network connected media devices such as game consoles, TVs, and set-top boxes offer an opportunity for core networking companies to reorient themselves away from a declining market," says senior analyst Jason Blackwell.

Home network device vendors such as Linksys (Cisco) and Netgear, as well as networking silicon vendors such as Broadcom are targeting these growing product categories aimed at home entertainment networking and connecting consumer electronics devices to the network.

Other vendors targeting this space include Apple, Roku and Vudu.

The best opportunities in the media networking market will arise from the growth of video and audio distribution around the home, as well as from new services that will be offered by service providers.

Initially, Wi-Fi will provide the majority of connections -- Ethernet will place a strong second. Over time, powerline, coax, and high-speed wireless connections will show strong adoption growth rates.

I believe that the major inhibitor to increased market adoption continues to be the complexity that is inherent in most home network devices. They are designed by engineers for their peer group, not for the typical mainstream consumer. Therefore, customer support costs are still relatively high.