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Set-top Box Market Analysis Released by ABI Research

New Features, IP Hybrids and Retail STB Will Drive Set-top Box Markets Past 2010, says ABI Research

The market for STBs (set-top boxes) will grow at a steady pace through the end of the decade before easing slightly, as service upgrades to existing pay-TV customers are completed and the market shifts from new-technology growth to growth driven by the addition of new pay-TV subscribers. According to a new study from ABI Research, three main drivers will propel this market in the coming years: advanced features, the new interactivity offered by “hybrid STBs”, and the possible development of a retail set-top box market.

“There’s a war going on in the trenches for TV customers,” says vice president and research director Stan Schatt. “In an effort to lock in customers, cable operators are migrating to newer STBs that offer features such as PVR (personal video recording) and high-definition support. Meanwhile telecom operators are leveraging IPTV technology to support interactive services.”

Accelerating sales of high-definition (HD) TV sets and the popularity of PVR functions are combining to spark customer demand for STBs supporting these advanced features. This will create a temporary market for upgraded boxes. Beginning in 2010, however, many existing customers will have completed their upgrades, and demand will begin to decline.

Over the next few years, STBs that can provide content using more than one platform will become increasingly popular and will begin to replace single-platform STBs in many markets. “In order to really understand this market,” notes Schatt, “you have to examine the growth of hybrid STBs that are finding their way into both cable operator and telecom deployments. Their ability to enable new interactive services for cable, terrestrial, and satellite operators will be a powerful engine for this market.”

Finally, as of July 1, 2007, as a result of a US Federal Communications Commission mandate, new STBs no longer include embedded security features, but can use CableCard or downloadable security mechanisms instead. This, together with the desire of cable operators to eliminate the cost of buying and leasing boxes to their customers, may lead to the development of a retail environment in which STB vendors vie directly for the consumer’s dollar.

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ABI Research’s “Worldwide Set-Top Box Market Analysis” (http://www.abiresearch.com/products/market_research/Worldwide_Set-Top_Box_Market s_CATV_DBS_IP_DTT) provides, among much else, an overview of shipments, pricing, and market revenue for CATV, DBS, IP, and DTT platforms. It forms part of two ABI Research Services: Home Networking (http://www.abiresearch.com/products/service/Home_Networking_Research_Service) and Multi-Channel Video (http://www.abiresearch.com/products/service/Multi-Channel_Video_Service).

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation and emerging technologies. For information visit http://www.abiresearch.com, or call +1.516.624.2500.

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