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Pay-TV Hybrid STB Integrated with Gateways

Shipments of pay-TV set-top boxes will continue to rise during the next few years as consumer viewing patterns shift and as video delivered via the Internet becomes more popular, according to the latest market study by iSuppli Corp.

A total of 147.8 million set-top boxes will ship worldwide in 2010 -- up 11.5 percent from 132.6 million units last year. Shipments will continue to rise in the next few years and reach 193.9 million units by 2014.

The continued growth of set-top boxes coincides with projections for worldwide subscribers to Internet Protocol TV (IPTV), and over-the-top IP Video services, according to Jagdish Rebello, iSuppli senior director.

Global IPTV subscribers will increase to more than 123 million units by 2014, up from about 33 million at the end of 2009 -- rising at a Compound Annual Growth Rate (CAGR) of almost 30 percent.

"The rise in numbers in both set-top boxes and IPTV subscribers bears profound implications for consumers and OEMs, signaling a major paradigm shift in TV viewing," Rebello said.

Given the change in the way consumers watch video content, the set-top box sits at the critical junction of what industry participants call the broadband residential gateway, noted Jordan Selburn, iSuppli principal analyst.

Because of this, service providers as diverse as telephone companies, cable operators and satellite pay-TV companies are realizing that the gateway device will be the means through which they can extend their networks into the digital home.

Set-top boxes must be considered the leading candidate for residential gateway systems -- not only providing a bridge from the house to the outside world but also serving as a conduit within the home among network-attached appliances -- including telephones, digital video recorders, PCs, gaming consoles, storage devices and security systems, Selburn noted.

Already, the integration of residential CPE capabilities into set-top boxes has begun. Service providers like Iliad in France have launched the AliceBox -- a single device that integrates a TV set-top box and a broadband modem.

Other than the set-top box, however, iSuppli does not see in the immediate future any other CE device integrating the residential gateway. Video game consoles and PCs could evolve to support the role of content servers, but these devices will likely not include gateway capabilities.

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