Shipments of Internet-Enabled Consumer Electronics Pass the 60 Million Unit Mark in 2007

Trojan Horses and Head Fakes Dominate Market, According to MultiMedia Intelligence

SCOTTSDALE, Ariz. — MultiMedia Intelligence reports today that shipments of Internet-Protocol (IP)-enabled consumer electronics reached 64 Million units in 2007. This represented nearly 73% growth. However, the market continues to be dominated by internet-enabled video game consoles.

While many of these game console IP interfaces remain unconnected, the enormous developing installed base represents a “Trojan Horse” with enormous potential for online gaming, music and video downloads, as well as a variety of internet-based value-added services. Already, in late 2007 Activision announced that more than 2 million songs associated with “Guitar Hero” were accessed through Xbox live over the previous five months.

“An increasing variety of TV-centric consumer electronics devices with IP interfaces is developing. Manufacturers are adding IP interfaces across TVs, DVD equipment, as well as cable, telco, and satellite set top boxes,” according to Mark Kirstein, President of MultiMedia Intelligence. “While manufacturers and operators are gradually adding IP connectivity, the IP-Enabled Consumer Electronics market has not reached a true inflection point beyond game consoles for hyper-growth. However, this growing installed base of CE devices with dormant IP ports could quickly become active with a simple network connection or software upgrade.”

The market for Digital Media Adapters (DMA), devices that bridge TVs into a home network, has demonstrated a series of head fakes. Many companies have bet their future on this market, but faced repeated disappointment. “Simply integrating the DMA function into CE devices is not enough to dramatically accelerate growth,” continues Kirstein. “As the ecosystem of content, services, devices and business models develops, the market will develop steadily rather than explosively.”

MultiMedia Intelligence’s new research also found:

• At the technical level, physical interfaces will stratify across Cat 5 Ethernet, 802.11, Powerline and Coax networking solutions, with many devices featuring multiple interfaces.
• Semiconductor revenue enabling these interfaces will exceed $2 billion by 2012.
• The value of embedded home networking middleware will approach $300 million by 2012, with about 1/3 available to third-party developers.

“Internet Protocol (IP)-Enabled Consumer Electronics: Are we there yet?” analyzes the service providers, equipment vendors, content service offerings and technology in the multimedia-networked home. The report also looks at in-home connectivity including analysis and forecasts of Ethernet, Powerline, coax, and Wi-Fi integrated into consumer electronics. Other forecasts include worldwide subscribers for broadband, VoIP, cable TV, satellite TV, and IPTV. The associated set top boxes, adoption of network-interfaces by device type, as well as the middleware and interface semiconductors are also included. Device segments include TVs, DVD players, DMAs, video game consoles, media servers, DVRs and set top boxes.