Analysts divided on digital home trends

Despite agreeing that consumers are interested in home networking, non-voice mobile content and digital home entertainment platforms, market research groups are divided on the extent to which convergence is actually taking place.

Research released this week by IDC suggested customers were heading towards a converged digital world, characterised by seamless connectivity between the Internet, home entertainment, computing systems and appliances.

"Customers are changing the consumption behaviour and preferences," IDC market analyst for consumer digital markets, Sophie Lo, said. "Consumers want to access the Internet through their television, and enable their plasma screen to work with their personal video recorder."

Lo said the digital entertainment sector was currently worth about $3.5 billion in revenues each year, a figure set to double by 2010. Over the same period she forecast revenues generated by the sale of digital entertainment equipment to grow from roughly $2 billion to more than $5 billion.

"Revenues going to digital entertainment service providers will grow slowly over time, while revenues to CE and IT vendors will fluctuate as new products are released," Lo said. "But it doesn't really matter what way you look at the revenues, they will be huge."

Having recently completed a survey into the technology usage habits of 3500 Australians, managing director of digital home entertainment research group Connected Research Services, Graeme Philipson, said the market for digital entertainment goods was segmenting rather than converging.

"We are seeing four separate markets emerge: information technology, consumer electronics, home automation and devices," he said. "Sure, consumers are enthusiastically embracing technology in each of these areas, but they are not looking for ways to make it all work together."

Philipson said its research findings, which are set to be released next week, would demonstrate a market enthusiastically embracing digital entertainment technologies as discrete offerings. This was at odds with the view of consumers implementing converged home entertainment networks.

"They're enthusiastically embracing into the different technologies, but they're not buying into the overall picture," he said.