M2 PRESSWIRE-15 December 1999-STRATEGY ANALYTICS: Strategy Analytics research -- European Internet appliance market worth $6.0bn by 2005 (C)1994-99 M2 COMMUNICATIONS LTD

* Internet appliances will reach 57% of homes, and "coexist" with home PC, not replace it

London, England -- Internet appliances will supplement the role of the home PC, not replace it, according to a new study from Strategy Analytics. While the PC will remain the dominant Internet access terminal, most homes will also have a number of other online devices. By 2005, the forecasters predict that 74% of European homes will be online; 81% of them will be using an Internet PC, but nearly as many will also have interactive TV or other Internet appliances.

Strategy Analytics, the leading technology and media consultancy, provides information and insights which help competitors develop strategies in home electronics and new media, communications and computing business.

The report, entitled "The Online Home - The Market for Internet and Online Devices", assesses the prospects for a wide range of devices connected to fixed wire communications networks. It concludes that, while the PC will remain a dominant fixture in the household, online TV-based set-top boxes will also become commonplace. Limited demand also exists for a range of new Internet terminals which are independent of the PC or TV, such as screenphones and Web terminals - sales of such devices will reach $300m in Europe by 2005.

Sales of interactive TV appliances, such as online digital TV set-top boxes and advanced games consoles, will reach $4.0bn in 2000, an increase of 15%. Sales will peak at $5.5bn in 2002, before declining to $4.4bn in 2005 under the impact of falling prices. Shipments, however, will reach 11.7m units in 2000, and rise at an average growth rate of 25% a year, reaching 30.1 million units a year by 2005.

"The online home is about multiple devices for multiple applications," said David Mercer, Senior Analyst with Strategy Analytics. "In the future, consumers will be online all the time, and from many rooms in the home, although they may not even be aware of it."

The average European online home will have 2.5 online devices by 2005. This represents an emerging opportunity for service providers and network operators, who will compete to become the "preferred supplier" to this range of different appliances. It will also reinforce the trend towards home networking and the need for broadband, always-on connections.

CONTACT: David Mercer Tel: +44 (0)1582 405678 e-mail: [email protected]