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An Uncertain Outlook for TV Set-Top Boxes

Each of the major set-top box (STB) segments -- including Cable, Satellite, DTT and IPTV -- faces widely different outlooks, according to the latest market study by In-Stat.

Satellite, the largest of the STB segments, experienced a 6 percent growth in 2008, bolstered by triple-digit growth in the Asia-Pacific region. Unit growth is likely steady for 2009 and 2010.

The cable STB market grew 8 percent in 2008 to nearly 45 million units. However, growth in 2009 looks to turn negative in this mature market.

The nascent IPTV STB market grew 55 percent in 2008, but similar growth will not continue. With few new telco TV deployments, unit shipments of IP STBs will experience a marginal increases in 2009 and 2010.

Digital terrestrial (DTT) STBs grew at 200 percent in 2008, driven by high-definition (HD) converter boxes supporting the U.S. analog broadcast TV transition to digital. But, these shipments represent an unsustainable upside. Growth will fall back to 23 percent in 2009 and then will contract by nearly 30 percent in 2010.

Across the STB markets, personal video recorders (PVRs) and a transition to HD are among the major technology drivers. Global PVR unit shipments (across all STB types) exceeded 25 million in 2008, an increase of 14 percent over 2007.

Perhaps hybrid OTT video STBs will experience greater demand. It's currently unclear.

In-Stat's study highlights include the following:

- Multi-room or whole-home PVR service has become available in an increasing number of cities in the U.S. over the last year.

- HD Satellite STBs will comprise 18 percent of total unit shipments in 2009.

- The semiconductor opportunity in standard definition (SD) DTT STBs will peak in 2011 at nearly $500 million.

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