December 6, 1999 12:10 PM PST

Intel, Proxim open door to home networking

Chip giant Intel, S3's Diamond Multimedia and Proxim are early leaders in the emerging market for technology that links PCs within a home, according to a new study.

Home networking technology connects PCs and other peripherals in a home so users can share printers, files or even a single Internet connection. It is expected to be a booming market as the percentage of homes with multiple PCs and associated devices grows.

Looking at third quarter sales this year, Intel led the pack with 54 percent of the market for home networking products based on phoneline technology, which connects PCs by plugging them into a regular phone jack.

Diamond was second, with 30 percent market share, followed by Compaq, Linksys and others, according to a new study by market research firm Cahners In-Stat Group.

Sunnyvale, Calif.-based Proxim leads the wireless home networking market, with 77 percent market share, followed by other players, including Diamond.

"It's mostly first-generation type products; plain, vanilla networking adapter cards," said Cahners In-Stat analyst Mike Wolf. "Like any industry, it's driven by a few vendors who are first to market."

While Intel and Diamond came out with technology that runs at one megabit per second (mbps), other players, such as the 3Com-Microsoft alliance and Nortel Networks' NetGear, waited until last month to release faster phoneline products, which run at 10 mbps.

Many of the wireless products by companies such as 3Com, Intel and NetGear, are expected to ship next year.

By the end of the year, home networking kit sales are expected to reach $137 million, and will jump to $281 million by 2000. By 2003, however, Cahners In-Stat believes the market will boom to more than $1.4 billion in sales.

Overall, phoneline networking kits are the most popular, with about 50 percent market share, followed by Ethernet-based products that occupy 30 percent of the market, Wolf said. Wireless kits rank third, claiming about 10 percent of the market.

In 2000, more home networking products will also be sold as part of a digital subscriber line (DSL) or cable modem purchase, as well as with PC packages, he said.


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