Set-Top Market Slumps In 2013: Infonetics

The traditional set-top box sector slumped in 2013, but suppliers have reason for hope as shipments of multi-service video gateways continue to skyrocket, Infonetics Research reported in its latest report on the set-top market.

The global set-top market, which includes IP, cable, satellite, and OTT media servers, reached $18 billion in 2013 a 10% decrease from 2012, Infonetics said in its bad news/good news summary.

"The overall set-top box (STB) market declined in 2013, but cable and satellite video gateways had a very strong year, with shipments growing 333% and 98%, respectively," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research, in a statement. “Video gateways collapse the STB and broadband CPE into a single device, and it's for this reason we expect to see a long-term shift to these devices, at least in North America, to reduce capex in multiple TV set homes."

U.K.-based set-top maker ended 2013 with the worldwide set-top revenue lead, while Arris, which acquired Motorola Home last April, claimed the revenue share lead in the fourth quarter of the year. Cisco, aided by sales of IP set-tops to telcos, finishes second in set-top box revenue in 2013.

Incidentally, Pace was the original supplier of the XG1 HD-DVRs that currently power X1, Comcast’s next-gen video platform. Arris, which saw set-top sales surge 43% in the fourth quarter, was recently added to that mix following product qualification at Comcast, which has X1 rolled out across its platform and is expected to accelerate consumer deployments this year.

Pace and Arris, and likely other suppliers, are expected to factor in as Comcast prepares the deployment of the XG5, a “headless”  gateway, and the kind of product that will help to fuel revenue growth in the emerging product category.

Global IP video gateway revenues to grow at a 9% compound annual growth rate from 2013 to 2018, said Infonetics, whose report also tracks set-top suppliers such as ADB, Apple, EchoStar, Huawei, Roku, Technicolor and ZTE.