A new report suggests that plasma and LCD televisions will lead the way in terms of revenue for home spending, however devices featuring internet-protocol connectivity will be the next important trend for digital consumers.

A study released on Monday by research firm, Strategy Analytics, shows that consumers around the world will spend $70 billion on flat panel TV's through 2006, representing a 44 percent growth from the previous year.

The study also indicates a trend towards IP connected devices, with sales of such devices comprising 14 percent of the digital home in 2006. These products, which can access digital media from the internet, or across home networks, will continue to grow in popularity as digital media services gain popularity.

While price competition remains intense, manufacturers that meet key customer needs are enjoying significant revenue growth, says Peter King, Director, Connected Home Devices research. The evidence is clear that consumers will increase spending on digital devices that improve their access to content and the quality of the entertainment experience.

Europe will be the world’s largest market for digital home devices this year, with revenues of $51.5 Billion and a growth rate of 38 percent. In the US, revenues will grow by 28 percent to reach $49.1 Billion.