MOUNTAIN VIEW, CALIFORNIA, U.S.A., 1997 JUN 12 (NB) -- REPEAT/By Linda Dailey Paulson. Some call them "the vending machine of the information age," but there are a growing number of companies that call interactive kiosks a gold mine as they become more pervasive throughout the US. A new report based on strategic research of the interactive kiosk market by the firm Frost & Sullivan, shows that market to be growing at "a formidable pace." The study, which has 1996 as its base year, determined the market to be $369.7 million, with an expected growth of $2.94 billion by the year 2003. The study findings included a projected compound annual growth rate of the kiosk market of 35 percent over the forecast period.

The study said part of the reason for the explosive growth in this technology niche is that kiosks allow "individuals to access products and information in an interactive and non-threatening manner. Interactive kiosks fulfill end-user needs and hold revenue- generating potential in areas ranging from small niche markets to mainstream business concerns."

Steve Pearson, a research analyst in Frost & Sullivan's connectivity and computer networking group, told Newsbytes, "there are various reasons this market is growing, and not a single overarching reason." Kiosks can be used to give information, such as the repositories of information on in-print records often found in music retailers, or make transactions, such as those that might function as a virtual bank in a grocery store or other public place, he said.

Pearson says the primary market for kiosks exists in retail, which currently accounts for more than 50 percent of the market. He says successful pilots, such as one conducted by Wal-Mart that resulted in the deployment of more than 1,000 kiosks throughout the country at the conclusion of the two year testing, are another reason the demand for kiosks has grown.

A factor easing use is that "the average price has fallen by one- half since 1993," said Pearson. And that easy entry for customers has increased the number of vendors in this niche. "There are vendors entering the market now that are brand new. Over the longer term, there will be some consolidation. Right now, IBM is one of the significant players in the overall market."

Demand for Internet access has also opened additional markets for kiosk vendors, particularly those seeking to capture the needs of the mobile user. Kiosks are being set up for access in public places such as hotel lobbies, airports and convention centers. Pearson said this is a development expected to have an impact on most of the vendors in this market.

Kiosks typically consist of a desktop computer with a hard drive, keyboard, CD-ROM drive, monitor, and audio/video capabilities. The end- user input device could be a touch screen, keypad, keyboard, magnetic card reader, pointing device, microphone, camera, or some combination of these devices.

For the purposes of the study, Frost & Sullivan determined 67 firms were in the interactive kiosk market in 1996. Of those, seven participated in all the vertical market segments: retail, finance, government, tourism and entertainment, and a miscellaneous category which Pearson said includes the food and beverage, health care, high technology, and transportation industries.

Among the various companies actively involved in the kiosk market are Atcom/Info, Diebold, Electronic Data Systems, First Wave, IBM Kiosk Solutions, Muze, NCR, Red Dot Interactive and MicroTouch Systems, Inc.

(19970612/Press Contact: Steve Pearson, Frost & Sullivan, 415-237- 4578, e-mail: [email protected]/Reported by Newsbytes News Network: http://www.newsbytes.com )