50% Of US Households Have A PC

THE WIRED HOME

New research indicates that the number of US homes which own a personal computer has nearly doubled since 1995.

According to market analysis firm Dataquest, the rise of the sub-$1,000 PC has helped grow penetration of the machines to roughly 50 percent among US households. In 1995, just 27 percent of all homes in the U.S. had a PC.

"The PC penetration rate continues to increase at a healthy clip, showing that the PC is rapidly becoming a standard household appliance," said Van Baker, director for Dataquest's consumer market group. "There is evidence that the first-time buyers are coming from households in the lower socio-economic levels. However, the increase in penetration is across all segments."

According to Dataquest, US PC penetration into the home market has been consistent over the past several years. In 1998 the home market increased by 7 percent over 1997 when 43 percent of US households had a PC. In 1996, US PC home market penetration was 36 percent.

Analysts have been predicting for several years that US consumers would flock to buy budget-priced PCs and the new data confirms this assumption. However, many developers, including microprocessor giant Intel Corp. have said they believe ease-of-use remains the roadblock to gaining access to the other 50 percent of American households. But Intel Corp. and other manufactures are facing new challenges as the PC becomes more like an appliance with price, becoming the major difference between many systems.

Intel has actively dropped its prices and introduced new products in the low-end of the PC market in order to better compete with other chip makers making a living off the sub-$1,000 sector. Lower average selling prices (ASPs) will be an issue facing the entire industry as PCs continue to drop in price and get accepted into the mainstream as an appliance.

The firm's Web site is located at http://www.dataquest.com.

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THE WIRED HOME

If one-telephone households are becoming a thing of the past, the same is true for computers. One computer won’t cut it anymore – as the research on and launch of home network products reveal.

New information from IDC indicates that the number of home office households with multiple PCs will soar from 7.8 million in 1998 to 12.1 million by 2002. The firm is predicting that this "spectacular growth" is creating a large wealth of opportunities for service providers and vendors to connect these PCs. IDC reports that Internet use in homes will be the application that drives widespread adoption of home networking "solutions" in multiple PC households.

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Home Networking About To Boom

About 21 millions homes will have more than one PC by the end of this year and the US home network will soon enter the consumer mainstream, according to a new study "Home Networking: Markets, Technologies and Vendors" by market researcher Cahners In-Stat Group.

The firm says the home network market, which now barely exists, will reach $1.4 billion by 2003, a figure representing growth of more than 600 percent, says the firm.

Of 21 million multiple-PC homes forecast in the US by the end of 1999, 12 percent will have some form of home network installed, says the firm. Single PC homes with some form of network will also increase, from under one percent in 1999 to nine percent in 2003.

Home networking won't be limited to households that have PCs, says study co-author Mike Wolf, a networking analyst. He points to set-top boxes and other gateways transmitting high-speed content throughout the home, and to home automation and other non-PC in-home networks as examples.

"As TV-to-PC connectivity begins to see higher acceptance with the availability of new cross-platform products, single PC homes become a viable market for home networking vendors," said Wolf.

Internet use is one driving force behind home networking, says the report. Another is the growing number of small office/home office (SOHO) businesses, while still another is the addition of second and third PCs to homes for use by children or as "project computers" for technically oriented users keeping the household's main computer available for primary uses.

IDC said that while home networks will provide many of the same benefits as networks set up in offices, the types of networks used in home offices will differ greatly.

"Networking products that will have broad appeal to home users must be simple, easy to install, and easy to maintain," Childs said. "Low price or high performance will not be able to overcome perceived or real difficulties with installation and maintenance of home networks."

Childs indicated that the short-term success of home networks will depend upon ease-of-use issues. IDC predicts that successful networking "solutions" will be those designed to enable applications beyond PC-to-PC applications, such as sharing Internet access in the home, home automation, and those that enable a TV to act as a PC.

Networking vendors have focused on three areas of technology to bring networking into homes: phone line, power line, and wireless.

According to Childs, phone line technology has the early momentum in home networking because of broad industry support and because products based on the technology already exist. IDC said that electrical wiring's advantage is that it is accessible throughout an entire house. However, the firm said technical problems are slowing adoption of the technology. Wireless offers the ultimate in flexibility and mobility in locating devices throughout the home, but high prices and the lack of standards-based products are hampering its home networking success, IDC indicated.

IDC's Web site is located at http://www.idc.com. Cahners In-Stat Group is on the Internet at http://www.cahnersinstat.com.

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