| STB manufacturers caught between rock and hard place, says ABI |
Dec. 09, 2003
While Scientific-Atlanta, Motorola, Pioneer and Pace each do their share of development in offering state-of-the-art features and services in their set-top box (STB) offerings, they are pressed to keep their costs down in efforts to keep prices low, according to market research firm ABI.
Unfortunately, the cost of components and manufacturing is not decreasing at the same speed as the increasing expectation levels of the cable MSOs (multiple service operators). This leaves very little room for the STB vendors to build new differentiators into their offerings; in turn, the MSOs are not willing to increase their capital expenditures in order to offer such features as HD, DVR and broadband connectivity through the STB they deploy. According to technology research firm ABI, the burden lies on the STB vendors and component manufacturers to find solutions while keeping total costs down.
"STB manufacturers are caught between a rock and a hard place," explains Vamsi Sistla, ABI's Director of Broadband Research. "On the one hand, they want to satisfy consumer demand by rolling out STBs with more advanced features while keeping costs down. However, in order to launch new products, they must be somewhat reliant on the decisions of the cable MSOs -- a provider of STBs in the home -- which are constantly monitoring consumer adoption and subscription rates."
With respect to shipments, another interesting trend has been developing between low-end and high-end STBs. High-end STBs will continue to increase their market penetration and cannibalize shipments of low-end STBs because of relatively enthusiastic consumer demand and fascination for features such as PVR (personal video recording), HD (high-definition), and home networking through high-end digital STBs.
This trend -- consumer demand for more and more features -- will result in the launching of all-in-one STBs. Manufacturers will develop products with multiple features built into the system, thereby providing the consumer with an entire suite of desired features contained within one product.
Some of the findings of ABI's latest Set-Top Box Quarterly Service include: - In cable PVR offerings, Scientific-Atlanta is emerging as a leader, with Motorola a distant second. This is partly due to aggressive PVR service launches by Time Warner Cable and Comcast. In Q3 of 2003, SA had around 90% of market share in the digital cable PVR install base, and this high market share will continue for the next few quarters in the US market.
- North American HD-only STB and satellite receivers will double in shipments, from 460,000 to 920,000 in 2004. At that time, their shipment numbers will start to erode once DVR-HD-enabled boxes reach the mass market in late 2004 and mid-2005.
- The recent agreement between the National Telecommunications Cooperative Association (NTCA) and the Consumer Electronics Association (CEA) regarding digital cable interoperability and STB retail strategy will commoditize the market for low-end STBs.
- Worldwide digital cable HD PVR STB shipments will overtake annual HD STB shipments in the year 2005 and annual PVR STB shipments in the year 2007, according to ABI's moderate forecast.
Coverage of digital STB (set-top box), digital satellite receiver, and IP STB shipments is available through ABI's Digital Set-Top Box Quarterly Service (STBS). The information service provides timely data on the market for advanced digital set-top boxes used in CATV, DBS, and video-over-DSL markets. This service examines the global trends in shipments, revenues, and penetration of advanced features for various distribution networks, including digital cable, DBS, terrestrial, and DSL and IP-based networks.
ABI is a N.Y.-based technology market research firm founded in 1990. ABI publishes market research and technology intelligence on the wireless, automotive, electronics, broadband and energy industries. Details can be found on the web at abiresearch.com or by calling 516-624-3113.
Copyright © 2004 Allied Business Intelligence Inc. (ABI). All Rights Reserved. Reproduced by DeviceForge.com with permission.
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