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New Telco TV Investment Hits a Reality Wall

The IP digital set top box market grew 55 percent in 2008, but apparently such high growth will not continue, according to the latest market study by In-Stat.

Many telcos have already launched digital pay-TV services, so there are fewer new customer prospects. In addition, the economic climate is sapping investment in new telco TV systems.

"Established telco TV providers like France Telecom, AT&T, Free, British Telecom, Deutsche Telekom, and China Telecom provided much of the subscriber growth that drives the demand for IP set top boxes," says Michelle Abraham, In-Stat analyst.

In-Stat expects that this situation will continue in 2009 and 2010. However with few new deployments, unit shipments of IP set top boxes will see only slight increases in 2009 and 2010.

In-Stat's market study found the following:

- More than 50 percent of 2009 IP set top box unit shipments in Western Europe will have hard disk drives.

- Among the key technology trends are improved power management and support for 3D graphics, multiple codecs, and open software platforms.

- The average bill of materials for an HD IP set top box will fall below $50 in 2010.

- Among the semiconductor competitors providing solutions for the IP set top box market are Broadcom, CopperGate, Intel, NXP, Sigma Designs, and STMicroelectronics.

- Motorola held onto the top market share position in IP set top boxes in 2008, but its market share slipped from 2007 as Cisco ramped up shipments.

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