May 27, 2005

According to a new report by the Diffusion Group, the number of network-connected devices will reach approximately 162 million worldwide in five years, up from 35 million in 2004.

Home network penetration remains low in the leading broadband countries, with the US and Japan a bit above 15%, South Korea and Germany around 2%, and the UK in the middle with 10%. Interestingly, although South Korea is the leading broadband country in terms of penetration, its home network use is negligible.

But the Diffusion Group expects the situation to change quickly. South Korea will achieve a 90% home network penetration rate by 2010. The penetration rate will grow far less sharply in the US, reaching 42% by 2010, the research firm says.

The rise of home networking is tied to the expansion of the number of networkable devices, which will double in number on average in homes worldwide between 2004 and 2010.

Broadband providers are doing all they can to encourage home networking, says Michael Greeson, co-founder and President of the Diffusion Group. "Broadband service providers are now looking 'beyond the modem' for new sources of revenue, and home networks are a key part of their strategy to dominate emerging digital home control points and thus locking revenue and profits."

In the US, interest in home networking remains low. About 20% of respondents in a Harris Interactive survey in October 2004 said they had a home network, most of whom used it to share a broadband connection (84%), a printer (64%) or computer files (58%.) Of those who didn't have a home network, the vast majority said there was no need for one.

Source: eMarketer