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Gartner Says Consumers will Spend 20 Times More on E-commerce with Broadband Access
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Lake Buena Vista, Fla., October 17, 2000 - According Gartner Group, Inc (NYSE: IT and ITB), by 2005 consumers will spend 20 times more on the Internet when using a high-speed broadband connection than they do with traditional analog dial-up modems. These findings were presented during Gartner Symposium/ITxpo 2000, the world's largest information technology conference.
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"The impact of consumer broadband access emphasizes the significance of worldwide investments in broadband technologies as evidence by AT&T's purchase of TCI and Microsoft's $18 billion investment in broadband technologies," said Ken McGee, Gartner Research Fellow.
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According to Gartner, a variety of factors will contribute to the broadband multiplier effect, including:
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- Convenience - broadband delivers an "always on" state to the PC, giving shoppers immediate access
- Quicker response time - Internet purchases will experience less frustration and time spent waiting
- User-friendly interfaces for consumers, which require greater bandwidth
- Customized experience for users enabled by greater bandwidth
- Time spent online is greater for broadband users compared to analog modem users
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By 2004, 29 million U.S. households will be broadband-enabled. This, combined with a penetration rate of overall Internet access of 75 percent by 2005, results in enormous purchasing power. By 2006, Gartner projects that 25 percent of U.S. households will buy more than $10,000 of goods and services over the Internet as opposed to turning to traditional brick-and-mortar businesses for these purchases. Of these mega-purchasing households, 75 percent will be broadband-enabled.
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"Looking at these spending levels, AT&T's motivation to pursue a strategy to charge a fee for each consumer delivered via broadband to retail businesses becomes obvious," continued McGee. "The broadband environment is extremely friendly for both high-end and frequent shoppers. This is similar to charging shops a higher fee for prime real estate in an elite neighborhood."
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About Symposium/ITxpo
Gartner's Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look today at the future of IT. For more than 10,000 IT professionals from the world's leading enterprises, Gartner's two annual Symposium/ITxpo events are key components of their annual planning efforts, and a place to gain insights into how their organizations can use technology to address business challenges and improve operational efficiency. For more information online, go to www.gartner.com/symposium.
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About Gartner
Gartner provides unrivaled thought leadership for more than 10,000 organizations, helping clients to achieve their business objectives through the intelligent and efficient use of technology. Additionally, Gartner helps technology companies identify and maximize technology market opportunities. Gartner's technology content and strong brand reach IT professionals globally through Gartner Research, its research and advisory unit, Gartner Services, its custom consulting unit; Gartner Events, including Gartner's renowned Symposia; and, at www.gartner.com. Gartner subsidiary TechRepublic, Inc. (www.techrepublic.com) is the leading online destination developed exclusively for IT professionals by IT professionals. Gartner, founded in 1979 and headquartered in Stamford, Connecticut, achieved fiscal 1999 revenues of $734 million. Gartner's 4,000 associates, including 1,200 research analysts and consultants, are in more than 80 locations worldwide. For more information about Gartner's industry-leading products and services, please visit us on the Web at www.gartner.com.
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