Use of Internet, home PCs surging

The computer industry has hit a milestone, with PCs in half of all homes, while use of online services has jumped to 33 percent, surveys show.

Three new studies have discovered something that is not altogether shocking: The number of U.S. homes with personal computers accessing the Internet is at an all-time high.

The new studies also point out that the industry has hit a milestone. Now, half of U.S. homes have a PC, an increase largely due to low-cost machines, better connections, and a desire to log onto the Internet.

Market penetration of home computers and online services
  Jan. '99 Jan. '98 Jan. '97 Jan. '95
Compters 50% 42% 37% 32%
Online services 33% 23% 17% 9%
Source: Odyssey
Yesterday, the Homefront survey from consumer technology market research firm Odyssey concluded that the home computer is rapidly eclipsing the television as the communication and information appliance for many consumers.

Evidence of this trend is the growing number of homes equipped with powerful computers, fast modems, and online service providers, according to Nick Donatiello, president of Odyssey. The study found that half of all U.S. homes have a PC, and that one-third of all homes are online.

Power and speed are key: Almost half of home PCs are running on Pentium-level processors, the survey found, while 31 percent are connecting to the Internet at modem speeds of 56-kbps. "Faster modem connections and more powerful processors have enhanced the overall entertainment experience of PC households," Donatiello said, in a statement.

"These advancements, together with reduced prices, have made the PC attractive to a broader range of consumer segments."

A separate survey released this week indicates that sub-$600 PCs now account for 19.9 percent of computers sold through retail stores, while computers priced between $600 and $1,000 account for 42 percent of the market.

Low-cost PC maker Emachines has aggressively targeted the low-end of the consumer market, going after lower-income homes with no existing computers. That strategy has paid off, as Emachines shot up to the fifth spot last month in retail sales, according to PC Data.

Overall PC penetration has almost doubled from 27 percent in 1994 to today's 50 percent penetration, according to the study, while Internet access from the home has increased from 6 percent in 1994 to 33 percent today.

These results echo a recent study from ZD Market Intelligence, which also determined that half of all U.S. homes now have PCs, up from 44.8 percent at the end of 1997. Dataquest also recently concluded that half of American homes have PCs, up from 27 percent in 1995.