Study: Appliances to Succeed, Eventually

Despite a slow start, the Internet appliance market is poised to grow dramatically, with shipments of more than 174 million units expected by 2006, according to a new study released Thursday by Allied Business Intelligence (ABI).

Much of that growth will occur outside of North America, according to the study. Initially, the U.S. and Canada will lead in appliance sales by they will account for only 37 percent of shipments worldwide by 2006, according to the study.

The study said that early attempts at Net appliances failed because of poor product designs, too-high hardware costs and flawed business strategies by the vendors.

“Vendors must continue to innovate and to design application-specific Internet appliances with an eye on appealing form factors that encourage frequent usage,” said report author Navin Sabharwal. He noted that early adoption will occur in households that already have PCs, not in non-PC homes, which many in the Net device industry expected.

“The goal for these devices should be to complement and leverage the PC rather than attempt to replace it,” he said. That means the Net appliance market really is “PC-plus” not the “post-PC.”

The adoption of in-home networking is critical for adoption of Net appliances, the report notes. The report predicts that wireless networking and networks that use existing powerlines will succeed in the long term.

The findings are part of the study: “Internet Appliances: Network-Centric Computing Opportunities in the Internet Age.”

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