New Internet access devices to surpass consumer PCs in shipments in 2002

Bolstered by the almost-daily announcement of new products, technologies, and vendors, the marketplace for information appliances is rapidly taking off, according to new research from IDC. As an ever-broader group of vendors attempt to address the Post PC Era, the worldwide market for information appliances will exceed 89 million units, or $17.8 billion, in 2004, up from a market of 11 million units and $2.4 billion in 1999.

As the Internet becomes more tightly woven into everyday life, an increasing number of consumers will desire the applications and services it can provide, said Bryan Ma, analyst for IDCs Consumer Devices research program. Current online users want access to services in more locations and situations, while many other consumers desire Internet access without the inherent complexities of PCs. It is clear the PC will not be the only enabling device as both groups find information appliances a solution that can improve their lifestyle and work style.

IDC has led the industry in defining, sizing, and analyzing the information appliance market since 1997. Information appliances, as IDC has defined them, are an emerging category of digital consumer electronics that provide low-cost, easy-to-use, consumer-focused access to the features and benefits of the Internet. IDCs information appliance taxonomy includes shipments from Internet gaming consoles, NetTVs, Internet smart handheld devices, Web terminals, email terminals, and screenphones. As these and other new devices arrive in the next few years, IDC forecasts that U.S. unit shipments of consumer information appliances will outnumber those of consumer PCs by 2002.

"The devices that will lead the information appliance market are ones that take advantage of existing infrastructures and usage patterns," said Kevin Hause, manager for IDC`s Consumer Devices research program. "Devices such as NetTV set-top boxes as well as Internet gaming consoles will benefit from consumers familiarity with the television. Internet connectivity is also making inroads into the increasingly popular smart handheld device market.

IDC predicts the other form factors (Web terminals, email terminals, and screenphones) should follow in volume, but these devices are only now arriving on the scene.

In its new report, Review and Forecast of the Worldwide Information Appliance Market, 1999-2004 (IDC #B21595), IDC analyzes, sizes, and forecasts the U.S. and worldwide opportunity for information appliances. The report provides an overview of each of the key information appliance form factors, as well as market sizing and forecasts. Key market dynamics are summarized and a year-by-year installed base is estimated. The report concludes with an overview of the entire information appliance market and how these devices stack up against PCs as a device used to access the Internet.

BMI-T Comment

BMI-T`s analysis of the South African market for devices capable of accessing the Internet shows a distinct lag in adoption of alternative access devices. Overall, takeup of information appliances in SA is expected to lag that of the USA by three years initially, with this lag shrinking to two years by 2003.

All told, BMI-T`s forecast for total alternative Internet access devices is an installed base of 1.2 million by yearend 2003, representing 29% of all devices accessing the Internet at that time.