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Networked Home Audio and Video is Evolving

A new study from ABI Research shows that as more consumers shift from storing their music collections on physical media to storing them on PCs, network drives or consumer electronics servers, the demand to deliver this music to other connected devices around the home will grow.

While the Zune and other Wi-Fi-enabled portable devices are early in their adoption phase, ABI Research believes that a significant factor contributing to the growth of this market will be network-based sharing, and synchronization between the network portable music market and the network home audio market.

"Early entrants into this market that have provided user-friendly systems, such as Sonos, have enjoyed loyal but small clienteles for their products," says research director Michael Wolf. "However, the entire profile of connected entertainment received a significant boost when Apple went beyond a single networked audio solution (Airport Express) to the release of the much more capable Apple TV. Apple TV has created a tsunami of additional consumer interest and corresponding vendor activity in the connected entertainment market."

The market for networked home audio consists of audio and media servers from the likes of Escient, Sony, and AMX, as well as connected client devices -- often ones that can play video as well as audio -- from a variety of vendors such as Roku, Linksys and Netgear, as well as Reciva Wi-Fi radio-based systems, which can connect to a PC, dedicated audio server or directly to the Internet. It also includes compete networked audio systems from vendors such as Sonos and Philips, as well as network connected speakers.

"Existing heavyweights in home audio and consumer electronics such as Yamaha and Sony have joined the early contenders," notes Wolf, "but we believe the market will take some time to develop. One of the key driving factors will be lower prices for dedicated audio/media servers: today a typical audio server can cost anywhere from $1000 to over $10,000. As large vendors bring scale to the market, we expect the average price of audio/media servers to drop to below $1000 by 2010 and to be close to $500 by 2012."

I believe that some consumers can immediately benefit from converting an unused desktop computer into a home network-attached media server. Companies like Orb Networks provide the free software, and the declining cost of internal hard drive upgrade kits make adding new multimedia storage a quick and relatively easy option.

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