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1/30/2008
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Internet-Enabled Gadgets Shipments Exceed 60 Million

The market for IP-enabled consumer electronics hasn't reached hypergrowth, outside of game consoles, according to an industry survey.

Shipments of IP-enabled consumer electronics reached 64 million units in 2007, according to a new report from industry analyst group MultiMedia Intelligence.

The report -- "Internet Protocol (IP)-Enabled Consumer Electronics: Are We There Yet?" -- said the number represents 73% growth, but the development represents a great potential for online gaming, music, and video, as well as other value-added services.

For example, the research points to Activision's recent announcement that Xbox Live users accessed more than 2 million songs associated with Guitar Hero in five months.

"An increasing variety of TV-centric consumer electronics devices with IP interfaces is developing," Mark Kirstein, president of MultiMedia Intelligence, said while announcing the report. "Manufacturers are adding IP interfaces across TVs, DVD equipment, as well as cable, telco, and satellite set-top boxes."

While manufacturers and operators add IP connectivity, the market for IP-enabled consumer electronics hasn't reached hypergrowth, outside of game consoles, Kirstein said.

"However, this growing installed base of CE devices with dormant IP ports could quickly become active with a simple network connection or software upgrade," he said.

He cautioned against integrating digital media adapters to connect TVs to home networks to drive growth.

"As the ecosystem of content, services, devices, and business models develops, the market will develop steadily rather than explosively," he said.

The report predicts that physical interfaces will stratify across networking standards like Cat 5 Ethernet, 802.11 wireless, power-line networking, and coax cable, with many devices offering multiple interfaces. That will drive semiconductor revenue beyond $2 billion by 2012, according to the report. Embedded home networking software is also expected to surge to nearly $300 million by 2012, with about one-third available to third-party developers, according to MultiMedia Intelligence.

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