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Global Set-Top Box Market : Unit Shipment Recovers as Competitive Pressure and Innovative Features, along with Global Pay TV Growth, Drive Uptake

  • December 2014
  • 32 pages
  • Frost & Sullivan
Report ID: 2563770

Summary

Table of Contents

Key Findings

•This market insight provides base-year estimates and 5-year forecasts for the global set-top box (STB) market. By application, the market is segmented into Internet Protocol Television (IPTV), cable, satellite (direct-to-home (DTH)), and digital terrestrial transmission (DTT); by region, it is divided into North America-Latin America (NALA), Europe and the Middle East (EMEA), and Asia-Pacific (APAC).
•All the form factors of STBs are taken into account, ranging from the basic MPEG-2 zapper boxes priced under $ x in the low average revenue per user (ARPU) cable market to the top-of-the-line home media gateways priced over $ x .
•In 2013, the global STB market performed better than expected, and it has a significantly improved long-term outlook. This is driven not only by faster-than-expected growth in IPTV but also by a resurgence in the cable and the satellite segments.
•Factors, such as operator upgrades to better compression technologies, including AVC today and HEVC tomorrow, the growing interest in over the top (OTT), which is driving the rollout of hybrid box designs, and the increasing global penetration of Pay TV, are driving sales.
•Growth restraints include saturation in terms of Pay TV households and STBs/household, the replacement of STB form factors by un-managed clients, such as consoles and tablets in the home, and the continued un-willingness on the part of service providers to incur major capital expenditure amid business uncertainty.

Introduction

•An STB is defined as an appliance that decodes digitally transmitted video content for television viewing. It is provided to subscribers of cable, satellite, IPTV, and DTT services. For clarity, analog-to-digital conversion boxes (used during DTT transitions) are not included in the market analysis.
•By application, STBs are segmented into IPTV, cable, satellite or DTH, and DTT. For clarity, although cable multi-service operators (MSOs) may leverage IP infrastructure for signal distribution, their STB purchase units are counted under cable rather than IPTV. IPTV is used interchangeably with Telco TV.
•DTT sales is relatively small, although the technology is gaining significance as Pay DTT services grow worldwide, particularly in Africa, which is marked by rugged terrain and a sparse, widely distributed population. Cable is the largest segment, driven by the near-ubiquitous availability of cable services worldwide. IPTV is the fastest-growing segment, while DTH remains a stronghold of high-end boxes.
•The key vendors in this market are ARRIS, Pace, Technicolor, and Cisco Systems. While larger vendors serve all verticals, many niche vendors offer specific specialties. For example, ADB and Amino specialize in high-end hybrid boxes, while BSkyB builds its own boxes. Echostar primarily caters to Dish Networks and its affiliates, while ZTE and Huawei mainly serve operators that contract with these companies for end-to-end triple-play or quadruple-play service buildouts.
•The digital divide between advanced and emerging economies is blurring, with many so-called emerging markets, such as India, China, and Brazil, beginning to look more like conglomerates of advanced and emerging pockets rather than uniformly backward regions. Accordingly, they should be treated as complex mixtures of high-end and low-end markets rather than a single low-end market, as they have been in the past. In these regions, growth is being observed in both low-end zapper boxes as well as high-end home media gateways - the emphasis is moving away from minimizing cost to implementing compelling, competitively differentiated Pay TV experiences that deliver value and staying power to consumers.
•Hybrid STBs continue to play a crucial role worldwide, as they help operators optimize the use of available bandwidth and maximize interactivity and customized content while minimizing infrastructural spend. The term ‘hybrid’ can imply different configurations; for example, hybrid DTH STBs include IP connections for OTT content delivery, while hybrid IPTV boxes leverage DTT or, sometimes, DTH for the transmission of free-to-air (FTA) channels.
•Gateways are also playing a key role, particularly in advanced economies; however, they were a niche form factor in 2013. Key restraints are expense, the complexity of app development, the fragmented and un-predictable nature of the connected device ecosystem, and the prevalence of multi-tenant housing with concrete structures in many urban regions.
•From a platform perspective, open platforms, such as Comcast RDK and Google’s Android, are overtaking more closed middleware – Frost & Sullivan offers an in-depth examination of middleware trends in its dedicated Market Engineering study titled Analysis of the Global Middleware Market.

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