Strong growth in the use of information appliances (IAs) in the Asia-Pacific (excluding Japan) region will see their sales overtake PC sales by 2005, according to a report released Monday by market analyst International Data Corp. (IDC).
IDC defines the IA sector as sub-US$500 consumer-focused digital electronics products, primarily designed to deliver the interactive benefits of the Internet or an Internet-like service. Devices include Internet-based smart handheld devices, Internet gaming consoles, e-mail/Web terminals and interactive television sets.
According to IDC, sales of IAs will increase at a CAGR (compound annual growth rate) of 83 percent between now and 2005, when sales will reach 18.9 million units. This compares with expected sales of 17 million PCs in the region in 2005.
Easy-to-use IAs will find buyers in both the developed and developing markets in Asia, according to IDC. In high Internet penetration countries such as Australia, Hong Kong, Korea and Singapore, IAs are being bought as a secondary Internet access device in households.
IAs will also attract first-time users in less-developed markets, according to IDC. The complexity of PCs intimidates many first-time users, so the idea of Web surfing on a TV or another simple appliance will be attractive for many families.
According to IDC, key features in the development of the market include:
-- Internet handhelds and gaming consoles will be the first sector to take off as users are already familiar with similar non-Internet devices.
-- interactive TV holds the largest potential overall as the ratio of TVs to PCs is much higher in Asia than elsewhere, with rapid pickup of interactive versions expected in 2002/2003.
-- the market will be dominated by large vendors that have the necessary capital and staying power to see the market through its development phase.
-- several hurdles remain, including regulation, infrastructure, business models and long-term profitability.
-- standards must be developed for content and delivery and user interfaces, and a common price point found.
South Korea, which has a strong Internet gaming culture, is currently the largest Asia-Pacific market for IAs, according to IDC. The IA market in China is still small but is growing rapidly, so China will overtake Korea by 2004 for IA sales.