The exploding market for small PC networks connected to Internet-capable TVs, sound systems, and home security products will exceed $16 billion by year 2006.That is one of the conclusions of the new 254-page study, Digital Dwellings: Technologies and Business Opportunities for Small Networks,

"With the aid of small networks, cyberspace will engulf the home," said Paul Pauesick, Datacomm Research's Director of Research and principal author of the report. "Consumer devices connected to home networks will reach out to the Internet for videos, music, and e-books. Remote services will look in on homes to monitor security and safety, diagnose household appliance problems, and provide family members powerful software applications," he added.

"This report explains why the home will become the battleground for the most advanced local area networking technologies," said Ira Brodsky, President of Datacomm Research. "Home networks will achieve blazing speeds of 100 Mb/s and faster to satisfy consumers' appetite for multimedia entertainment," he added.

Digital Dwellings: Technologies and Business Opportunities for Small Networks includes an Executive Summary presenting five-year forecasts for sales of small networks in the U.S./Canada, Japan, and Western Europe, plus worldwide sales of network-capable household devices. The Technologies section analyzes "new wire," "existing wire," and "wireless" solutions. The report also provides comprehensive coverage of key issues such as Interoperability, Business Alliances, Applications, and Business Models. And over 70 vendors are profiled, including 3COM, Apple Computer, Atheros, Broadcom, emWare, Enikia, Home Director, Intel, Intersil, Motorola, Nokia, Proxim, Scientific-Atlanta, and ShareWave.

Additional conclusions found in Digital Dwellings: Technologies and Business Opportunities for Small Networks:

1.The creation of home networks -- often starting with two PCs sharing Internet access -- will accelerate. More than 50% of U.S. households have PCs, and a growing fraction own multiple PCs. High-speed Internet access is spreading rapidly.

2.Home networks will spur development of network-capable devices. Consumers will control traditional products such as TVs, VCRs, DVDs, and sound systems from their Web browsers. New portable products, such as MP3 players, will access both home and vehicle area networks. Telephones will use home networks to create individual extensions, voicemail boxes, and ringing tunes for different family member. Users will "look in" on their homes while away. Patients wearing health monitors and panic buttons will be linked to caregivers 24 hours per day throughout the home and yard.

3.Ethernet will continue to dominate the small office. HomePNA will dominate the home. Wireless will grab a growing share of both markets. The IEEE 802.11a and HiperLAN/2 wireless standards will lead to 100 Mb/s network interface cards (NICs) selling for <$100 by 2006.

4.Other transmission media will create home "subnetworks." Powerline communications will never rival Ethernet, HomePNA, and wireless as a high-speed backbone, but will dominate links to sensors, switches, timers, and appliances.

5.Standalone gateways will not succeed in residential applications, but will do well in small offices. In the home, gateway functions will be gradually added to cable modems, set-top boxes, DSL modems, and wireless access points.

6.There is a need for a short-range radio technology enabling portable devices to communicate with home networks, public access points, and each other. However, Bluetooth is too expensive, not sufficiently scalable, and faces potential interference problems. Atheros' "5-UP" proposal offers an intriguing alternative.