The Year the “Digital Home” Reached Critical Mass

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After years of false starts and industry hype, key metrics suggest that the digital home has reached critical mass among U.S. consumers.

As the 2005 Consumer Electronic Show begins in Las Vegas this week, industry leaders will (once again) evangelize their company’s “cutting edge” technologies, and (once again) roll out a variety of consumer electronic products that, while interesting in a Jetson-esque sense, will have little applicability to the lives of ordinary consumers. Among the most widely-hyped concepts of previous shows – and without doubt a centerpiece at this year’s CES – has been “the digital home,” an amorphous and abused concept that has been expanded to include everything from Internet-connected refrigerators and talking toasters to robots that wash windows on command.

But new research from The Diffusion Group, a consumer electronics think-tank based in Plano, Texas, suggests that for the first time since the concept of the “digital home” was crystallized in the mid-1980s, the key components that TDG uses to constitute the digital home have reached critical mass. These components include (1) ownership of multiple Internet-capable devices, (2) subscription to a broadband Internet service, and (3) deployment of a home network.

“Industry leaders have pitched the concept of the “digital home” for years, but it always remained something that was likely to happen tomorrow,” said Michael Greeson, Founder and President of The Diffusion Group. “The problem was that 'tomorrow' never arrived and the digital home was becoming a vacuous concept, somewhat of a pipe-dream. But this is no longer the case.”

Greeson bases his conclusion on the fact the three key metrics by which The Diffusion Group defines the “digital home” have exceeded 16% penetration among US households. At year-end 2004:

•    Broadband Internet service penetration stood at 34%;

•    Home network penetration passed 17%; and

•    Multiple PC penetration topped 35%.

“Given that the basic constituents of the digital home are all present in at least 17% of all US households, the “digital home” can now be discussed in the here-and-now, not just as some distant vision of technology enthusiasts.”

About TDG Research

TDG Research is a “think tank” of consumer technology analysts charged with providing timely, actionable intelligence designed to best position new consumer technologies for rapid diffusion. Our team is committed to providing market research and strategic consulting services based on conservative, real-world analysis and market forecasts grounded in consumer research. For more information about TDG Research, visit our website at http://www.tdgresearch.com or email info@tdgresearch.com.

Contact:

Andy Tarczon

andy@thediffusiongroup.com

214-677-9723

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