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Value of Networked CE and Home Networking

According to a new study from ABI Research, the market for home networking and connected entertainment devices will grow at an astonishing rate over the next few years, as the total value of home networking hardware, gateways, networked storage devices and networked entertainment devices rises from $14 billion in end-user revenue in 2005 to more than $85 billion by 2011.

The major driver in overall revenue growth for this market is the transformation of most conventional consumer electronics devices such as game consoles, DVD players, TVs and portable media players from stand-alone devices to network-connected ones, using both wireless and wired IP communications technologies.

"This market has reached a major turning point," says Principal Analyst Michael Wolf. "Home networking has moved beyond a basic broadband sharing model to one of networked entertainment and convergence across the PC, consumer electronics and communications devices. The emergence of enabling technologies such as 802.11n for wireless video distribution, HomePlug AV and MoCA as alternative multimedia network backbones, and DLNA media server and device interoperability software, are all solidifying the foundation for an explosion of new devices and applications based on a fully connected home."

New digital media applications are creating end-user demand for connected entertainment and communications devices. The rise in popularity of multi-room PVR, place-shifting, and networked gaming are fast creating an increased need for a pervasive connectivity throughout the home, to the Internet and between different devices.

Service providers are also a catalyst in this market, as IPTV providers such as Verizon, France Telecom, PCCW and AT&T utilize home network technologies for video distribution, while others look to home networking as a way to extend data services without having to rewire the home. Residential gateways and networked set top boxes are becoming standard requests as service providers look for new revenue streams based on IP and converged networked services.

"The total number of network connections shipped into the connected home will grow from 247 million in 2005 to over 861 million by 2011," says Wolf. "Wi-Fi will become the most common of the connection technologies, as consumers look to connect home servers, gateways, networked consumer electronics and portable devices over the media network."

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