As the proposed marriages of Comcast and Time Warner and AT&T and DirecTV move forward, this latest wave of consolidation is poised to have an effect on the telecom supplier market, creating a fresh batch of winners and losers.
That, of course, will extend to the realm of video gateways and set-top boxes, with at least one analyst believing that this new round of M&A will cause a shift in a market that is largely made up of Pace, Arris (thanks to its acquisition last year of Motorola Home), Cisco Systems, Technicolor and EchoStar.
“This mature, yet fragmented market, in which the top five vendors account for about 37% of the revenues, is ripe for further consolidation,” Sam Rosen, practice director at ABI Research, predicted in a research note this week, pointing out that Arris, with its focus on cable and IPTV, stayed ahead of Pace, which, in his estimation, is “over-weighted on satellite.”
On the domestic cable front, it’s too early to know how the STB market will shake out once Comcast and TWC come together, but it’s pretty clear which suppliers would be in the driver’s seat and which ones would appear to be most vulnerable.
Arris and Pace already have a solid in at Comcast as the MSO continues its rollout of the X1 platform and devices that are based on the Reference Design Kit, so they presumably will remained fairly locked in if TWC gets brought into the fold.
On the other end, Samsung, Humax and Cisco might have reason to worry. Samsung and Cisco have been key suppliers to TWC, while Humax has its foot in the door after notching a deal to supply TWC with its first RDK-based box – an IP-based HD client device.
While all three vendors might still have a play at Comcast post-merger because they are in the RDK ecosystem (a goal of the RDK, after all, is to create more supplier diversity), the ground they’re standing on will likely be a bit more unstable in the wake of more MSO consolidation.
