Multimedia drives home networking chip market growth

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Sep. 14, 2004

In-Stat/MDR is bullish on the market for chips used in networked consumer devices over the next four years. It says that increasing sales of networked multimedia-oriented products such as PVRs, media adapters, and wireless home gateways will drive sector growth despite falling unit prices for chips.

The finding comes from In-Stat/MDR's report Home Network IC 2004: Media Networking Boosts A Strong Market. The report projects 12 percent yearly growth for the home networking chip market, expected to reach $2.3 billion in 2008. In-Stat/MDR earlier forecast sales of $17.8 billion for the home networking market as a whole by 2008.

Unit shipments, home networking ICs
Principle Analyst Mike Wolf explains, "Delivering video and audio entertainment over the network is becoming the main focus of product development as well as end-users. Ethernet, new wireless networking standards such as 802.11n [story], and new media backbone technologies like MoCA and HomePlug AV will become standard in many of the new media center and media hub designs hitting the market in the next few years. Entertainment servers in the home will also drive the demand for network-oriented media processing engines, which In-Stat/MDR believes will be a $700 million market by 2008."

Additional findings from the report include:

Ethernet and wireless LAN will account for over 90% of all physical layer connections (PHYs) shipped in 2008.
Residential gateways and other home networking devices will hit $338 million by the end of the forecast period, helping to drive the communications processor market.
Multi-room PVR and other entertainment networking applications will boost both coax (MoCA) and powerline networking (HomePlug AV) to over 23 million connections shipped in 2008.
Wireless LAN ICs will be propelled by 802.11g over the next two years, with 802.11g accounting for 78 percent of connection sales in 2006. 802.11n will begin shipments in 2006, and as the first technology to enable wireless video networking for the majority of end-users, will see strong demand, accounting for 55 percent of the consumer WLAN IC market by the end of the forecast.

The full In-Stat/MDR report is available now, priced at $3,495. It includes forecasts for home networking IC units and revenues, including separate forecasts for the PHY, comm processor, and networked media processor sectors. The PHY forecasts are broken down between Ethernet, WLAN, MoCA, HomePlug, HomePNA, and 1394. WLAN forecasts are broken down into different protocols, including 802.11n.

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