Report: Set-Top Boxes ‘09-‘10 Bright Spot, Then Dimming

TV makers are building their capabilities into sets. Some operators claim they are the top source of capital spending. Still others see connected gaming consoles taking their place. Nonetheless, researchers say the digital set-top box segment is defying the economic downturn.

In fact, IMS Research says their volumes are expected to grow substantially through this year and next, explaining that “TV is a cheap form of quality entertainment, one of the last costs to be cut by western households,” said Stephen Froehlich, an IMS analyst. “Adoption in developing countries is continuing at unprecedented rates.”

STB shipments will see almost 10 percent growth over the previous year according to Froehlich, an analyst in the company’s consumer electronics research group.

IMS Research expects the growth of digital TV households to continue as digital services become available to new markets. Digital TV services, including HD, are also providing consumers the option of staying home to watch movies and sporting events, rather than paying for tickets and concessions at the theater or sports field.

As a result, IMS Research is forecasting that worldwide digital TV households will still see 20 percent growth over 2008.

“Not only are North American and Western European households keeping their subscriptions, developing countries have seen unprecedented adoption of digital pay-TV services in the last half of 2008,” said Froehlich.

“However, there is a downside. Annual set-top revenues are already near their peak, which we are forecasting to be $19 billion in 2011 while prices of most types of set-top box are expected to decline by more than 10 percent each year,” the analyst said. “While there are some very real opportunities out there for suppliers to this market, they are getting harder and harder to find.”

To help suppliers identify new opportunities, IMS Research is publishing “Set-top Box Deployments and Ecosystem,” which examines the relationships between all of the world’s major pay-TV operators and their STB and related technology suppliers.

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