ABI: Facing Competition, Operators Take More Set-Top Box Risks
August 4, 2008 // Published as a news service by IHS
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Faced with stiff competition in the cable market and from telephone companies vying for TV viewers, traditionally risk-averse cable operators are becoming increasingly "bipolar," according to ABI Research, supporting a roadmap that may require the deployment of new set-top boxes (STBs) with more advanced features and functions, while also apparently aiming to drive the ubiquitous STB to extinction.
Analysts said STB vendors are offering a variety of new features to entice operators.
When it comes to STBs, operators have traditionally tread carefully and have largely been unwilling to shop around much for new technologies.
"Because some operators are facing stiffer competition, they are now willing to experiment a little more, venturing into offerings such as electronic program guides, wireless support, home networking support for MoCA [Multimedia over Coax Alliance] or HomePlug, and expanded hard drives - all at increasingly affordable prices," said ABI Research analyst Paulhwa Lee.
There is also a growing trend toward partnerships and consolidation, analysts said. For example, Motorola acquired a Chinese STB vendor - Dahua Digital, while decoder manufacturer Broadcom partnered with Chinese STB vendor Coship and decoder manufacturer Next Experience Semiconductors (NXP) acquired Conexant's STB operations.
Some operators are also partnering with new STB manufacturers. Analysts said as the U.S. market matures, subscriber growth slows and evolves toward STB replacement. STB sales may still be driven by one-off developments, such as the CableCARD mandate, the digital to analog transition and the unification of data and video. But operators know that these transitions are capital-intensive.
At every opportunity, operators are trying to standardize and commoditize STBs by formulating standards and consortia, such as tru2way and CableLabs. As a result, analysts said many STB manufacturers are looking to fresh markets in Asia, Europe and Latin America.
Source: ABI Research.