IDC Predicts: Information Appliance Market to Explode to $17.8 Billion by 2004

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 (Framingham, Mass.). 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, an analyst for IDC’s 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.”

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. IDC’s information appliance taxonomy includes shipments from Internet gaming consoles, NetTVs, Internet smart handheld devices, Web terminals, e-mail 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, e-mail terminals, and screenphones) should follow in volume, but these devices are only now arriving on the scene.

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