The home networking hardware market has reached a mature state as many broadband consumers in developed economies have already installed home network hardware to share the Internet among their PCs. However the large majority of consumers today have yet to connect a non-PC device to their network and, ABI Research believes that over time, this extension will be the core driver of overall home networking growth. Total network-enabled consumer electronics and media devices shipments are expected to grow from 92 million in 2007 to nearly 460 million by 2012, exceeding the 368 million network-enabled home gateways, routers, network adapters and home network storage products shipped the same year.

“While home network adoption continues to rise around the world, especially in emerging markets such as China and India, the overall market growth for basic connectivity has started to slow,” says research director Michael Wolf. “This slowing growth has resulted in increased price competition, as well as investment in new entertainment-related networking approaches by home networking hardware companies. The question for home networking companies is: can they make this transition, or will the networked entertainment market be subsumed by more traditional consumer electronics companies?”

Emerging markets such as China and India, as well as continued growth in more mature markets such as Japan and Australia will result in the Asia-Pacific region becoming the largest overall home networking market. Total home networks in Asia-Pac will grow from 29 million in 2007 to 85 million by 2012, with China accounting for nearly half of these.

“We see the continued transition by service providers to push more integrated gateways as a key market driver in the growth of overall home networks,” says Wolf. “Even in China, where low-cost modems have been the primary CPE for most broadband consumers until very recently, we are seeing providers such as China Telecom begin to move their consumers to home gateways. This increased penetration of gateways will result in more consumers looking to connect their PCs and other Wi-Fi or Ethernet-enabled devices to their broadband connections, as well as driving new and potentially interesting service delivery options.”

Home Networking and Digital Home Network Market Analysis examines all segments of the home networking and networked entertainment market, and contains in-depth, country-level analysis for Asia-Pacific and Western Europe regions.