|
Cable Set Top Box Market Remains Strong, But
Growth Slows
The cable TV set top box market had record unit
shipments and revenues in 2000 with over 18 million total boxes
shipped. The success of cable operators in signing up subscribers
for digital services fueled the market, especially in North America
and parts of Europe. The cable set top box industry's recent unprecedented
growth is slowing, however, as orders and shipments have flattened
out over the past few months.
Even with a reduced rate of growth for digital
cable services, cable set top box sales will nonetheless continue
to rise over the next few years. Worldwide revenues for cable set
top boxes are forecasted to rise from $3.3 billion in 2000 to $4.1
billion in 2005, according to Cahners In-Stat/MDR, with digital
cable models accounting for the bulk of sales.
Since the first digital cable set top boxes
were installed in 1996, cable operators have steadily increased
their demand for digital boxes. Indeed, over the past 18 months,
demand for digital boxes has occasionally outstripped supply. This
market boom has raised the profitability and stature of the set
top industry and attracted several new manufacturers to the digital
segment of the market.
Digital cable TV services have been the leading
contributor to digital cable set top market growth. Advanced interactive
services such as video-on-demand, time shifting, and interactive
gaming are only available in a few areas, but could become strong
future drivers for increased digital penetration, says Mike Paxton,
In-Stat/MDR senior analyst.
Demand for digital cable service has been especially
strong in the United States. As of July 2001, there were 12.2 million
U.S. digital cable subscribers. Europe also had about 2 million
digital subscribers at that time.
Despite increased optimism about advanced digital
services, cable operators are still hesitant to deploy advanced,
or the so-called "thick" digital cable set top boxes. Operators
are concerned about the high cost of the units and problems surrounding
the development of software to support them. As a result, the industry
has concentrated this year on improving the capabilities of basic,
or "thin," digital set top boxes like Motorola's DCT2000 and Scientific
Atlanta's Explorer 2000.
Several operators have also scaled back some
of their digital deployment plans this year. For instance, AT&T
Broadband has decided to deploy only features that customers want
most-video-on-demand, interactive gaming, stock tickers, and weather
reports-for now. Instead of deploying Motorola's DCT5000 box in
selected markets, AT&T will continue to deploy the "thin" DCT2000
boxes.
A Motorola spokesperson has said the two companies
have also discussed the development of a mid-range box with a capability
that falls between the DCT2000 and DCT5000, according to Paxton.
AT&T has also asked Microsoft, which invested $5 billion in the
company, to rethink its strategy and develop a simpler, less expensive
middleware interface with less functionality.
Scientific Atlanta, another leading cable set top manufacturer,
is also committing greater resources to beefing up the capability of its basic
digital cable set top-its Explorer 2100 and 3100 model series. Based on the
Explorer 2000, these new models offer greater interactive TV capabilities such
as video-on-demand at "thin" set top prices.
This research highlight is drawn from the Cahners In-Stat
Group report, Digital
Cable Services Sustain Cable Set Top Box Growth (#MM0112ST), which
examines the cable TV set top box industry, paying special attention to manufacturers,
technology trends, and the semiconductor content of the boxes. It provides a
cable set top box bill of materials forecast, breaks out manufacturer market
shares for 2000 and the first half of 2001, and updates worldwide unit shipment
and revenue forecasts for the next five years.
|
