The Digital Home Entertainment Revolution: Technology Enablers

Report Highlights

• BCC estimates the total size of the digital home entertainment market at $129 billion in 2004, rising to $166 billion in 2005 and $411 billion by 2010, an AAGR of nearly 20% over the next five years.
• BCC segments the market for digital home entertainment devices into gateways (e.g., digital TV receivers, cable and satellite boxes), hubs and nodes (media PCs, digital audio and video players), output devices (digital TVs and loudspeakers) and networking devices. Hubs and nodes are the largest device segment, accounting for 56% of total device sales in 2004 and 55% in 2010.
• Output devices such as digital TVs accounted for 16% of total digital home entertainment devices in 2004, a percentage that is expected to rise to more than 27% by 2010. Gateway devices are expected to increase their market share slightly between 2004 and 2010, i.e., from 25% to 26%. Networking devices consistently account for between 2% to 3% of the market.

INTRODUCTION

The movements from analog to digital, and from modem to broadband access have combined with the development of powerful chips, new storage and output technologies, and the emergence of new platforms and standards to drive a revolution in home entertainment. PCs can now merge with other home entertainment devices. Content created or stored on one type of entertainment device can be accessed via any other device. Films and TV programs can be shown on any screen in the house without wires trailing across floors. The entire household’s music can be stored on one device, but available wherever there are speakers in the house. Entertainment is available on demand, anytime/anyplace.

This timely BCC Research report addresses the global market for devices that are purchased by individual consumers for the downloading, creation, storage and playback of digital video, audio and multimedia entertainment content for their personal use in the home. In addition to the consumer market for digital home entertainment devices, the study quantifies the OEM market for key enabling technologies used in digital home entertainment equipment, including chipsets, MEMS data storage, and display devices.

This comprehensive study will be invaluable to executives in the electronics industry, entrepreneurs, investors, venture capitalists and other readers with a need to know where the market for home entertainment-related devices is headed in the next five years.

SCOPE OF STUDY

This analysis:

• Identifies the home entertainment devices and technologies with the greatest commercial potential in the near- to mid-term (2004-2010)
• Analyzes recent sales trends and quantifies current sales of each device and technology
• Identifies and evaluates the impact of economic, business, demographic, technological, legal/regulatory and other factors that will drive the future market for each device and technology
• Forecasts future sales of each device and technology in value and, where possible, unit terms through 2010.

METHODOLOGY AND INFORMATION SOURCES

The findings and conclusions of this report are based on information gathered from industry sources, including manufacturers of home entertainment equipment and technology suppliers such as chip and memory manufacturers. Interview data were combined with information gathered through an extensive review of secondary sources such as trade publications, trade associations, company literature, and on-line databases to produce the projections contained in this report.

The base-year for analysis and projection is 2004. At the time this report was written, i.e., early 2006, data for 2005 were not yet universally available. With 2004 as a baseline, market projections were developed for 2005-2010. These projections are based on a combination of a consensus among the primary contacts combined with our understanding of the key market drivers and their impact from a historical and analytical perspective. The analytical methodologies used to generate the market estimates are described in detail in the section on Detailed Market Projections.

All dollar projections presented in this report are in 2004 constant dollars.

ANALYST CREDENTIALS

Andrew McWilliams, the author of this report, is a partner in the Boston-based international technology and marketing consulting firm, 43rd Parallel LLC. He is also the author of numerous other BCC Research reports related to consumer electronics and other high-tech consumer goods, including GB-317 Data Storage Media: Materials, Technologies, Markets; G-292 Digital Image Sensing, Storage and Transfer; G-291 Global Mobile Positioning Applications: Commercial, Military, Homeland Defense; GB-285 Emerging RF Technologies; GB-265 Semiconductor Microlithography: Materials and Markets; GB-342 Materials and Devices for High-Performance Sports Products; and GB-309 Smart and Interactive Textiles