Home network market update

The big winners in 2003, predictions for 2004

The home networking market has thrived over the past few years as consumers snatched up gear to share broadband. So which vendors are winning in the critical home router and residential gateway markets? Let’s take a look at some In-Stat/MDR market shares for 2003 and see.

The home router market is the biggest part since most users buy them to connect a broadband modem to multiple PCs using Ethernet, wireless or both. The top three vendors for home routers are – no surprise – Linksys, Netgear and D-Link, with Linksys leading the pack with a third of the total market.

But Netgear and D-Link aren’t far behind with 12% and 11%. Other vendors, such as Belkin and Buffalo, have started to climb the charts, but neither has yet achieved more than 3%. Surprisingly, Microsoft has yet to make an impact, taking only 2.6% market share for the last quarter of 2003 and even less for the year.

After years of miniscule volumes, the residential gateway market started to hit its stride in 2003. The total market shipped more than 1.5 million units, with the company synonymous with the term, 2Wire, the clear market leader with 43%. DSL specialists Netopia and Efficient Networks, a division of Siemens, also shipped some volume near year-end, with Linksys, Netgear and D-Link also in the mix.

In 2004, we expect the fastest growing category to be residential gateways. The DSL gateways have shipped the most, while cable gateways have been slow to catch on despite the push of the cable industry into the market with CableHome.  

Home routers will also do significant volume, but we expect the market to slow over the next few years as more broadband modems become gateways, and vendors such as 2Wire, Netgear and Linksys allow consumers to move from a two-box modem and router setup to one in which the gateway acts as the center of the home network.