Home Networking Components Go Retail

DALLAS, November 3, 2000 - A new report from Parks Associates reveals a growing retail presence among companies manufacturing end-user home networking products, an indication that the home networking industry is making headway in the mass market.  The effect is already visible on retail shelves, according to Networks @ Home:  The Retail Market for Home Networking Components.  Currently, 35% of home networking components are shipping through brick-and-mortar retail channels, and initiatives such as the Internet Home Alliance will only strengthen the budding relationship between home networking manufacturers and retail outlets.

"As more products enabling enhanced connectivity and Internet services begin to roll out, the activity in the retail space will increase accordingly," said Nikki Robison, a home networks analyst for Parks Associates.  "Already, we are seeing plans for interactive kiosks and in-store product demonstrations to display the benefits of a connected lifestyle."

"The Internet has introduced streaming and downloadable audio and video, altering both the delivery and format of entertainment," said Tricia Parks, president of Parks Associates.  "Consumers, as they start to understand the sheer breadth of their choices, do not want to be confined to one room or one TV set.  These consumers are starting to anticipate future solutions and advanced entertainment options with a growing amount of optimism."

Business models are shifting in order to educate consumers about the extent of solutions available and to provide opportunities for customers to experience connectivity, entertainment, and content-rich applications at retail locations.  The announcement of the Internet Home Alliance, made at Parks Associates' Forum2000, confirms that large retailers intend to play an aggressive role as the home networking market continues to gain strength by building a foundation based on standards.

The effort to devise open standards and specifications, though incomplete, has greatly benefited manufacturers in developing products for retail sale.  Beyond coexistence, "standards" grant added benefits, including backward compatibility, interoperability, ease of installation, and ease of use, that allow for a cheaper cost of production per unit and per variety of product.  Home networking manufacturers thus have more resources for marketing efforts and consumer education, along with the ability to influence the purchase decision at the retail level, where consumers make decisions based on simple, communicable benefits that enhance their lives.

"These products have to show obvious value, and Parks Associates anticipates that retailers and manufacturers will make great strides in leveraging what is otherwise expensive shelf space inside a retail location to demonstrate the benefits of these products to the consumer," Robison said.

For additional information about this study, please contact Steve Harvey at 972-490-1113 or sales@parksassociates.com.

About Parks Associates: 
Parks Associates is a Dallas, Texas-based market research firm specializing in emerging technologies and services for the home.  Founded in 1986, Parks Associates provides primary and secondary research on home systems, in-home networks, home security, consumer electronics, telecommunications, Internet service, energy utility, and subscription TV industries.  Parks Associates' clients include both Fortune 500 companies and small start-ups.  Services include syndicated reports, multiclient studies, custom consulting, workshops, and conferences.