New Survey from The NPD Group Uncovers Latest Trends in Home Networking

Consumers Look to PC Companies for Home Networking Needs

PORT WASHINGTON, NEW YORK, Dec. 29, 2003 - The popularity of home networking is on the rise and PC companies such as Dell and HP are establishing themselves as the choice supplier for home networking consumers, according to a survey conducted by The NPD Group.

Overall, Dell was identified as the clear choice among potential suppliers for those planning to install a home network. Dell was cited as a leader in developing home networking products by close to half (49 percent) of those who have a home network and more than half (57 percent) of those who don't yet have one. HP came in just a few percentage points under Dell among those who currently have a home network (44 percent) and 40 percent of those who are planning to install one. Over 50 percent of respondents cited Dell as a product leader, support leader and value leader for home networking products.

"Given that most of what consumers do with home networks today are PC centric tasks, it is not surprising that most consumers said they would turn to PC companies to supply their networking gear," said Stephen Baker, The NPD Group's director of industry analysis. "The question for the future is how consumers will view these providers when the uses begin to involve more extensive inclusion of home entertainment gear."

Regarding functionality, the home networking survey found that consumers planning a home network are expecting significantly more functionality than is currently available. Planners anticipate being able to easily add devices to their network and to use the devices to do tasks such as media file sharing and streaming among the devices, tasks that are not simply accomplished given most of what is readily available. Those with home networks are much more realistic about the capabilities of the technology and are satisfied with their ability to perform the expected tasks while realistic about the challenges facing them should they attempt to incorporate more tasks and devices into the network.

"Today, digital photo and video sharing represent the most popular media -related task accomplished on the PC. In order to capitalize on the consumers' interest in home networking, manufacturers must develop and support improved media -sharing products," Baker added. "If suppliers are not able to provide the next wave of buyers with devices and infrastructure that meet these expectations there is potential for disappointment and unhappiness among these network planners."

The survey also reveals the type of home networks being installed. When looking at current home network owners, over half reported having an Ethernet network and 22 percent reported having a Wi -Fi network. When examining respondents who have more than two computers at home, two -thirds of such respondents reporting the use of Ethernet but Wi -Fi is becoming more popular especially among notebook owners. Consumer's desire for mobility and the natural combination of no wires networking and notebook computers have propelled sales of both categories in 2003.

Sales data collected through NPD's point of sale panel shows consumers increasing choice of wireless networks as their preferred installation. Through the first 10 months of 2003 sales of wireless networking hardware exceeded $500 million in US retail sales, reflecting revenue growth of almost 120 percent. Wireless networking products account for 56 percent of all revenue generated for consumer networking devices, attesting to the powerful draw Wi -Fi networks exert over the buying public.

"As consumers begin to embrace the technological changes by the current wave of digital convergence, home networking will be one of the first technologies to which consumers will be exposed," said Baker. "The reality of today's home networking falls far short of what the networked home of the future will look like. Today's network owners recognize that while would like to do more their home networks, the current technology has limits."

The NPD Group's home networking survey was fielded between October 29 and November 6, 2003. NPD e -mailed a questionnaire to 20,000 -targeted panelists who are members of NPD's online consumer panel. The final results are based on information from 9,795 completed surveys.

About The NPD Group, Inc.
Since 1967 The NPD Group has provided reliable and comprehensive sales and marketing information for a wide range of industries. NPD provides critical knowledge on what is selling, where, to whom and why to help our clients make more successful, fact -based business decisions. Today more than 1,300 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their business and positively impact sales and revenues. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, cellular, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, travel, toys and video games. For more information visit

About NPD Techworld
NPD Techworld, a division of The NPD Group, provides sales and marketing information for manufacturers, retailers and distributors in the consumer electronics, information technology hardware, software and cellular industries. NPD Techworld provides the most accurate market intelligence available, including what is selling, where, to whom and why. NPD Techworld combines an unparalleled view of consumer purchasing with critical insight on commercial purchasing for a complete picture of the technology market. Information is delivered online in a secure, Web -based environment by easy -to -use tools that make information accessible and actionable to a wide range of users from executives to sales and marketing to research. Today, more than 95 percent of market -leading companies in the tech industry rely on NPD Techworld for the knowledge they need to drive better, more fact -based decision making.

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