New IDC Survey Reveals Strong Consumer Interest In DVD Players And Digital Televisions, But Modest Response To Internet Screen Phones And Handhelds

FRAMINGHAM, Mass., July 16, 1998 — Among the many new types of digital consumer electronics products introduced in late 1997 and early 1998, DVD players and PC/TV combinations have captured the highest consumer awareness, although consumers indicated that they were most interested in purchasing digital televisions (HDTVs), DVD players, and NetTVs within the next twelve months, according to a new survey report published by International Data Corporation (IDC).

By contrast, consumers were much less aware or ready to purchase products such as Internet smart handheld devices, Internet screen phones, and on-line gaming consoles. NetTVs fell squarely in the middle of the range of market awareness and intent to purchase, with 26 percent of U.S. households stating they are familiar with the concept and seven percent stating they were likely to purchase one in the next 12 months.

Vendors are beginning to lose track of which products, if any, consumers really want. "Each product has its own merits, but consumers only have a limited budget," said Sean Kaldor, vice president, IDC's Consumer Devices research. "Thus far, the results are most favorable for TV-centric technologies, which is very good news for TCI, Microsoft's WebTV Networks, and NCI, among others."

But mass awareness and acceptance are not necessarily required for products to be successful. Internet screen phones and Internet smart handheld devices are shipping well over a million units per year. "It is better to have a good product that is known and understood by a valued niche than a marginal product that is known by everyone as such," said Kaldor.

Significant Vendor Opportunities

This new study 1) which examines cross-product consumer awareness, interest, and the intent to purchase old and new types of digital consumer electronics products 2) also revealed there is a significant and growing number of multiple device households. With over 54 percent of homes running 3+ televisions, and with more than 12 percent running 2+ PCs, IDC believes there is a tremendous opportunity to provide home networking solutions if vendors can pick the right combination of performance, features, and ease-of-use.

This survey of 1,661 U.S. households is based upon the IDC/LINK and ACNielsen Homescan Panel conducted in April and May 1998. Additional key findings include the following:

Accessing the Internet is a daily event for over 12 percent of U.S. household

Although only 21 percent of homes have on-line services, over 43 percent report that e-mail is used regularly by household members at home, at work, and/or at school

Of homes with TVs (99.7 percent of all homes) nearly one-third (30 percent) do not subscribe to cable TV indicating a limit in the market for vendors seeking to provide enhanced Internet-based services to cable-connected homes.

IDC's report, Consumer Devices Heat Up U.S. Homes: IDC's 1998 Consumer Device Survey Results (IDC #B16512), takes the first major cross-product measurement of consumer awareness, interest, and intent to purchase each of the various new digital consumer electronics products. The research also provides a benchmark analysis of the interest in these devices against interest in other standard technologies such as VCRs, home theater systems, and smart handheld devices. It is available for purchase by contacting Cheryl Toffel at 508-935-4389 or at ctoffel@idc.com. For additional information about IDC's Consumer Devices program, contact Beth Freedman at 508-935-4764 or at bfreedman@idc.com.

About IDC

Headquartered in Framingham, Mass., International Data Corporation provides IT market research and consulting to more than 3,900 high-technology customers around the world. With a global network of 375 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide IT markets, products, vendors, and geographies.

IDC/LINK, an IDC subsidiary, researches and analyzes the home computing market, leading-edge technologies in telecommunications and new media, and the convergence of computing and consumer electronics.

IDC's World Wide Web site (http://www.idc.com) contains additional company information and recent news releases, and it offers full-text searching of recent research.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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