In-Stat/MDR states in its report “Digital Domicile 2004: Home Networking Hits the Big Time” that large numbers of broadband users installed home networks in the past year. The $3,495 report also forecasts a doubling in value of the equipment that will be connected to home networks in the next four years. The research firm specializing in forecasting developments and tracking trends in the semiconductor and communications industry cites the desire to share audio and video content among multiple entertainment devices as a driving force.
The report states that increasingly, new technologies are making wireless a viable alternative for home networking. It also notes that retail storefronts have become the dominant place to purchase home networks.
Personal experience backs up the In-Stat/MDR findings. Last week the wireless 802.11b router in my home bit the dust. When I bought it online three years ago, I paid $239.00. Since then, 802.11g and other faster wireless technologies have moved to the forefront. However, I still had my computers fitted out with 802.11b cards, and this “older” technology was delivering satisfactory speed. I shopped around a bit and rather than upgrade the entire system bought a new 802.11b router at my local Staples. After rebates, it cost $9.95.
I bought at a retail store, and I bought old technology that had dropped in price 96% in three years. What drove that price down: the arrival in the marketplace of higher speed technology. And by the way, I could have upgraded my entire wireless system to 802.11g for about what the original router alone had cost. I probably would have done it if it hadn’t been for the $9.95 price.
When what was the dominate technology a mere three years ago drops to less that 5% of its price and the newer better alternative is half the cost of its predecessor, we are seeing a tsunami of a trend. Wireless is the trend wave of the future in home networking. Its lowering cost and increasing performance will drive the sale of entertainment hardware, spur the development of new products, and open more distributions channels.