33 Million U.S. Homes Will Have Residential Gateways By 2005

Parks Associates Projects Significant Upturn In U.S. Market For Residential Gateways By 2005

7-Feb-01

The emerging market for residential gateways (RGs) will more than triple over the next five years, growing from 8.6 million units in 2001 to more than 33 million units in 2005. Driven primarily by the demand for broadband Internet and high definition entertainment services, and recent advances in home networking technology, the cumulative value of the residential gateway market is expected to approach $3 billion by 2005.According to ""The Residential Gateway Report: Third Edition,"" Parks Associates' latest RG analysis, the U.S. market for residential gateways will also witness new forms of RGs being deployed. These devices will incorporate a variety of different features and formats, ranging from set-top boxes to whole-house RGs, indicative of the evolution of the RG concept as this market grows.""The early market for residential gateways suffered from the absence of both sufficient home networking technologies and consumer demand,"" says Michael Greeson, Analyst with Parks Associates. ""Today, however, the technologies most essential to the development of more functional and less expensive residential gateways - including advances in semiconductor design such as system-on-a-chip solutions - will soon be readily available. Moreover, with the market for residential broadband Internet service rapidly expanding, there is interest in the commercial possibilities of the residential gateway because of its unique ability to enable many value-added services.""Parks Associates believes that 2001 will be a telling year for the residential gateway. As the RG market begins to mature, industry, technology and consumer factors will begin to coalesce and accelerate the move from an early-adopter market to a mass market.Yet there remain many challenges facing both companies involved in this space and the industry as a whole. Current challenges to the industry include the need to develop appropriate business models, entrance and exit strategies, and needs-based marketing strategies. On the technological side, the RG must be future-proofed and constructed with adequate functionality while allowing for easy installation and configuration to minimize cost and consumer frustration. For the consumer market, the industry must establish a convincing value proposition and affect shifts in consumer behavior. ""The Residential Gateway Report: Third Edition"" profiles more than 35 companies and well over 50 different products. The report also identifies and analyzes market drivers and inhibitors, and includes annual and cumulative RG deployment projections as well as industry surveys. For additional information about Parks Associates, visit www.parksassociates.com.

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