Set-top boxes morphing into MHGs, says IHS

Set-top boxes morphing into MHGs, says IHS

Market news |
After a three-year flat period the global set-top box (STB) is set for three years of growth in 2013 through 2015 followed by three years of declines, according to IHS Technology.
By eeNews Europe


The growth spurt coincides with STBs being repositioned as multimedia home gateways (MHGs).

Worldwide digital STB shipment revenue totaled $20.3 billion in 2013, up 3 percent from $19.6 billion in 2012, as presented in the attached figure. Revenue will set new highs during the next two years and will peak at $22.8 billion in 2015. This follows the period from 2010 through 2012 when revenue remained in the $19.5 billion range.

Global digital set-top box revenue forecast (US$-billions). Source: IHS Technology, July 2014

"Set-top boxes proved to be critical to the strategies of pay TV operators in 2013,” said Daniel Simmons, director for connected home research at IHS, in a statement. "Far from being pushed out of the living room by Internet-enabled consumer electronics, STBs are being repositioned as the hub of the connected home. STBs increasingly are being transformed into multimedia home gateways, which combine support for pay-TV services with Internet access, residential gateway services, Wi-Fi and other advanced features."

Growth in 2013 was mainly driven by MHG reaching large scale in North America. MHGs are being used by a variety of service providers to compete with over-the-top (OTT)-rivals such as Amazon and Netflix. STB manufacturer Pace leads this vital market segment with a share of more than 48 percent in 2013. Cisco continued to lead the global pay-TV STB market in revenue terms.

Such companies as Comcast, DirecTV and Dish Network with their MHG strategies in the U.S. market are driving high-end STB sales through to 2015 while Chinese and Indian cable TV digitization and the International Telecommunication Union’s (ITU) GE06 deadline in 2015 for the analog terrestrial TV switch-off will continue to drive large volumes of lower-value boxes. However, many of these projects will near completion in 2015 and the market will contract to $20.7 billion by 2018.

The longer-term view is more positive as STBs that can support ultra-high-definition (UHD) pictures using High Efficiency Video Codec (HEVC) will become significant toward the end of the forecast period. IHS expects pay-TV operators to purchase 13 million UHD STBs in 2018.

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