Set-Top Box Market to Remain in Flux

Although Set-Top Boxes (STBs) have been around in one form or another for more than 30 years, the industry is far from settled down. Whether looking at the technology or the business aspects, STBs should remain one of the most dynamic areas of the electronics industry for at least the next decade, and quite possibly beyond, according to iSuppli Corp. The form that the STB may ultimately take is uncertain, but what is certain is that the next decade's version will look and function quite differently from the box sitting in most people's living rooms today.

Over the next few years, much of the STB market will be driven by expanding box capabilities. For millions of consumers worldwide, High Definition (HD) and Digital Video Recording (DVR) have become technological necessities of life that they just can't do without. In fact, HD and DVRs are becoming such a part of consumer lives that by 2012, more than 70 percent of digital Set-Top Boxes (STBs) shipped are expected to integrate support for one or both of these technologies, up from about 35 percent in 2007 according to iSuppli Corp.

"DVRs are cheap to integrate into STBs because Hard Disk Drive (HDD) costs have plummeted so much," said Jordan Selburn, principal analyst for set-top boxes for iSuppli during a presentation at iSuppli's North American Briefing here last week. "With the street price of storage just pennies per gigabyte and falling daily, the time is not far off when video storage hardware, whether at home or remote, will be both essentially limitless and virtually free. With cable or satellite companies only charging $5 or so a month for DVR support, who wouldn't want the ability to record their shows and movies?"

"HD falls into a similar category as DVRs," Selburn said. "HD video processing chips are migrating to 65-nanometer semiconductor manufacturing technologies, causing their incremental costs to drop compared to standard-definition devices. HD display prices are falling rapidly as well. iSuppli forecasts that more than 125 million of these displays will ship in 2008, and customers will demand HD content to watch on their new televisions."

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