The market for PCs as digital hubs in living rooms to explode at 41% CAGR

Today's shipment levels of PCs that serve as digital hubs in living room entertainment systems remain too low to be a factor in the overall consumer PC market. However, shipments of media center-equipped PCs are increasing at a phenomenal rate, according to IDC. In 2006, 5.85 million media center PCs will ship worldwide. These systems will have the software and hardware necessary to qualify as media center units, with both the media center operating environment and combined TV tuner and remote control. The value of this market is estimated at nearly $6 billion, with the U.S. market accounting for 46.3% of the total.
In the longer term, based on the most likely scenario, worldwide shipments of media center PCs will expand at a compound annual growth rate (CAGR) of 41.3% from 2005 to 2010, with the U.S. market increasing at a CAGR of 34% during the same period. In 2010, IDC expects worldwide shipments to reach 27.5 million units, with 9.5 million units absorbed in the United States, generating a worldwide revenue opportunity of $29.4 billion. The U.S. revenue opportunity in 2010 will be $12.6 billion.

The past two months have seen a series of movie download deals involving AOL with Intel, Amazon with six major movie studios, and others, bringing the personal computer closer than ever to a more defined media-centric role. These deals also give consumers another compelling reason to own media-capable PCs. Media center capabilities are seen as value-added features that enable PCs to function as mini entertainment systems in addition to their role as Web surfing, email, productivity tools, and increasingly as Voice-over-IP solutions. IDC believes that the success of media center PCs will be closely linked to the wider availability of content that is now being pushed to consumers. The potential for that success is evidenced by iTunes' sale of 125,000 Disney movies in the first six days of its service offering.

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