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Report: Home networking to branch out

The number of U.S. online households with home networks should quadruple by 2008, a report says, as consumers expand networks to include entertainment gear and appliances.

Forty-four percent of U.S. online households will have home networks in place by 2008, according to a Forrester Research report released Tuesday.

The anticipated growth is expected to come as users branch out from networking their multiple computers to connecting their networks to entertainment equipment and then, later, to household appliances, according to the report. Currently, 12 percent of U.S. online households have home networks.

"What comes after the PC network is a bridge from the PC home network to the entertainment center," said Charles Golvin, a Forrester senior analyst. "People want to play their audio stored on their PC networks on their stereos, or take a slide show of their digital photographs and show it on TV. The third stage is home automation functions using computer resources, like improving your home security system."

Creating a PC network is an attractive starting point for a number of consumers who want to share resources, such as broadband connections, printers and files. And cheap component prices have helped spur those efforts, Golvin said. Routers in a wired networking system, for example, cost roughly $40.

And in a couple years, the PC network is expected to expand to home entertainment devices in greater numbers. Wireless 802.11g, for example, will have its standards established by then and fall under mainstream technology. 802.11g will allow users to send video from their computers to their TVs. The PC network serves as a rival to set-top boxes, which want to dominate the functions of an entertainment system.

Although establishing a PC network and expanding it to entertainment devices is still a difficult task for the average consumer, those considering such a move may find solace in the relatively cheap component prices, Golvin noted.

But home appliances tied to a PC network may not be so lucky. The cost to develop a network-ready dishwasher may make its retail price prohibitive, Golvin said. However, in the next four years, greater adoption of home-automation appliances may take root.

"We can expect to see reasonable adoption by 2007," Golvin said. "There will be enough network homes by then, so there's an installed base and, as a result, a greater demand for these appliances and devices."

Forrester predicts that 37 million U.S. households will have a home network by 2008--a four-fold increase from the estimated 8.1 million for 2003.

And although phone lines and Ethernet can be found in roughly 86 percent of home networks in the United States, wireless is expected to account for the majority in the coming years, Golvin said. He noted that wireless accounts for 14 percent today.