Forrester Predicts Explosive Growth In Home Networking and IP Usage

October 1, 2009 – Forrester Research says more than 30 million homes will add home networks over the next five years, ensuring not just that the Internet will continue to rise as a consumer playground but that it will mingle and co-exist along with televisions.

As more households add home networks they’ll then have the opportunity to hook a PC to a TV or find other means to route Web content to the television set, according to a new Forrester report that dives into how consumers use technology today and what they’ll do so in five years. In fact, the report says, home networks and high-definition TVs are the two fastest-growing segments of consumer technology.

At the end of 2008, about 32 million homes in the U.S. had set up wireless networks, with another seven million likely to come on line by year’s end. By 2013, about 63 million homes will have home networks, representing an annual growth rate of 13 percent.

As wireless networks mushroom in use, expect Web-to-TV solutions to flourish, too, including Apple TV, as well as Boxee, which currently counts 600,000 customers, and Roku, which now delivers programming from Netflix and Amazon through its set-top box to the TV set. Roku has sold more than 100,000 boxes.

These findings from Forrester are promising for service providers who have been or will add Internet TV options for consumers, whether through a software option or an alternative set-top box. In fact, the expected growth in home networking suggested service providers would be wise to consider a panoply of converged services for consumers, who will increasingly demand and become accustomed to the content-anywhere lifestyle.

High-definition TVs will expand in usage, too. Forrester says 43 percent of U.S. home now have HD sets. HDTVs were the fastest growing technology last year with nearly 10 million homes adding a set – a growth rate of 27 percent. Forrester predicts HDTVs will continue to lead the pack with a 14 percent growth rate each year for the next five years. By 2013, Forrester says 85 million homes will have HD sets, up from 47 million at the end of last year.

Older families are leading the way when it comes to HDTVs, perhaps because they have more disposable income. Homes with adults 40 years and older and kids younger than 18 are avid technology consumers, using more PCs, music players and portable GPS devices than any other group. But they still like traditional media forms too.

“They are avid buyers of individual technologies….Yet these consumers spend slightly more time each week with traditional media sources than with new media, and they lead the high-definition (HD) charge, with the highest percentage of HD sets as well as HD service,” according to the report.

Meanwhile, young singles and couples – under 40 and without kids – can be found online a lot of time. Representing nearly 19 million homes and 49 million adults, this group’s personal and work use of the Web exceeds that of any other group.

“They are also more likely to go online in places other than home or work, and they tend to carry the net with them, whether via a wireless home network or out and about,” Forrester says. “For example, young singles and couples are 55 percent more likely than the average US adult to access the Web on their phone.”

Likewise, young families are tech-savvy and connected. Comprising nearly 19 million homes and representing about 40 million adults, these families are plugged in, the report concludes. “These young families are highly wired, and they buy shared technology that has some payoff for the kids, which is why Blu-ray disc players, digital video camcorders, DVRs, and game consoles are most prevalent in these households. For themselves, these consumers have a strong affinity for the latest and greatest in mobile – not only do 86% of them own a mobile phone, but that phone is also more likely to include advanced features like music or video playback than a phone owned by an older consumer or a childless contemporary.”

It’s worth noting that as phones evolve and become smarter, service providers would be wise to fully extend their services to mobile phones too.