Electronic Design

Internet = Ubiquity

The Internet qualifies as a hot market simply because of its growth, its ubiquity, and its influence on our lives. Virtually all businesses and more than half of U.S. homes now have high-speed Internet access.

But its growth is beginning to slow. Market forecaster Parks Associates estimates there are currently 39 million homes without Internet access, with only 2 million offline homes planning to sign up to get Internet services in 2006.

"We are clearly facing a problem of demand, not supply," says John Barrett, Parks' director of research. "Computers and Internet service have never been cheaper, yet many households still show little enthusiasm for the technology."

Parks admits those numbers may be deceptive because its surveys also indicate that about 14 million U.S. households without Internet service at home access the Web at work or other locations, such as a library or an Internet cafe.

But among users, Internet activity is at an all-time high. Neilsen/NetRatings reports that online searches conducted across approximately 60 search engines in the U.S. rose 39% year-over-year in January 2006 from 4 billion searches to nearly 5.7 billion, the highest number of online searches to date.

Internet services also anticipate growth from new services. The TIA, whose members represent virtually all of the major telecom players, expects broadband to be the fastest-growing network sector of the Internet globally, expanding at a 28.3% rate annually (see the figure). This is expected to create a huge opportunity for voice-over-Internet Protocol (VoIP).

Market projections suggest that by 2010, there could easily be more than 32 million VoIP subscribers in the U.S., with telecom, cable, and Web service companies battling for market share, if not market dominance. That could mean even more merger activity in telecom.

AT&T and Yahoo officially launched their integrated Internet-based voice services in April, with AT&T becoming Yahoo's global preferred network termination provider for PC-based calling services. The two companies also plan to extend their relationship into Internet Protocol television (IPTV).

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