Internet population to max-out at 80%: 20 February 2003. (Home: Analysis).

Once everyone in the US who wants Internet access and can afford Internet access has it, the number of users should stabilize at roughly 80% of the country's population. Ben Macklin explains.

As the online population matures, the remaining offline population consists of those least likely to feel the need to use the Internet. Indeed, surveys show that those who currently do not use the Internet say that they have no compelling need to do so. It seems apparent that Internet penetration will peak at 75% to 80% of the US population, with the remainder of the population not able to afford or not interested in hooking up to the Net.

A recent UCLA survey shows that not having a computer continues to be the primary reason for not being online, but those who have no interest getting online follow closely behind.

Since there is a strong correlation between income and PC ownership and, likewise, a strong correlation between PC ownership and Internet access, the fact that PC prices are falling is helping bridge the digital divide.

The Yankee Group predicts continued PC growth over the next five years so that 84 million, or three-quarters of all households, will have a PC by 2007.

Since the 2000 Census, PCs have steadily become more affordable in the United States. According to Banc of America Securities' estimates, average selling prices for PCs fell by 7.2% in 2000 in the US, and another 3.7% in 2001.

US PC sales data gathered by NPD Intelect indicated that in the third quarter of 2001, PCs selling in the $500 to $1,500 price range were selling the best, with $800 PCs selling the best of all.

Data from Gartner Dataquest shows that the average selling price for PCs in the US will continue to fall over the coming years, which will help expand the Internet user base across the country.

The US Internet population continues to grow, but at an ever decreasing rate. By the end of this decade the US internet population will max-out at between 75% and 85%, with all those wanting or being able to afford Internet access having it available to them at home, work, school, university and on their mobile device. Reasons that Americans Do Not Go Online, 2000-2002 (as a % of respondents who do not use the internet)

2000 2001 2002 No computer 37.7% 25.5% 28.5% No Interest 33.3% 21.4% 23.0% Don't know how to use 18.9% 6.9% 15.4% Too expensive 9.1% 2.6% 9.6% Fear of technology 4.2% 5.6% 2.6% Privacy/security issues 2.9% 1.6% 0.8% Not appropriate for children 1.9% 0.8% 1.4% Computer not good enough 1.4% 1.2% 3.4% Consumes too much time 0.0% 1.6% 3.6% Source: UCLA Center for Communication Policy, February 2003 046926 [c] 2003 eMarketer, Inc. Note: Table made from bar graph US PC Households 2000-2007 (in millions and as a % of

total households) 2000 66.2 (62.8%) 2001 69.5 (63.3%) 2002 72.7 (67.6%) 2003 75.6 (69.6%) 2004 78.2 (71.3%) 2005 80.6 (72.7%) 2006 82.6 (73.8%) 2007 84.2 (74.5%) Source: Yankee Group, November 2002 045395 [c] 2002 eMarketer, Inc. Note: Table made from bar graph Average Selling Price of a PC in the US, 2001-2006 2001 $1,317 2002 $1,394 2003 $1,355 2004 $1,293 2005 $1,227 2006 $1,164 Source: Gartner Dataquest, June 2002 043457 [c] 2002 eMarketer, Inc. Note: Table made from bar graph

Ben Macklin is a Senior Analyst with eMarketer and author of the newly-released North America Online report. You can reach him at bmacklin@emarketer.com with comments, questions or suggestions.