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Pay-TV Set Top Boxes Transition to MPEG-4

The global pay-TV market has been somewhat unpredictable for vendors that supply the key elements of the service delivery infrastructure. After a record-setting year in 2008, worldwide demand for digital cable set top boxes (STB) is falling in 2009, according to the latest market study by In-Stat.

The slowdown in unit shipments and revenue has generally been concentrated in the comparatively advanced cable markets in North America and Western Europe. The market slow-down has been due to reductions in cable operator capital expenditure (CAPEX) budgets brought on by the global economic recession.

Meanwhile, unit shipments to China are projected to set another record in 2009, approaching 20 million units, contributing to a rise in the overall Asia-Pacific market. In addition, increasing demand for digital cable TV services is pushing digital cable set top boxes into new markets in Asia, Latin America, and in Eastern Europe.

"Even with a slight decrease in unit shipments in 2009, the cable set top box market remains both dynamic and robust," says Mike Paxton, In-Stat analyst. "There are some significant technology transitions, including the transition to MPEG-4 and the move toward a hybrid QAM + IP cable set top box that are creating new opportunities for cable set top box vendors."

In-Stat's market study found the following:

- Global unit shipments of digital cable set top boxes are projected to reach 47 million in 2009, a decrease of 6 percent over 2008.

- Low-cost, digital terminal adapter (DTA) product unit shipments are beginning to have an impact on the cable set top box market in North America, especially in terms of product ASPs.

- While Motorola and Cisco Systems remain the top two cable set top box manufacturers, out of the remaining eight cable set top box manufacturers in the top ten, six of them are from China.

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