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Growth Opportunities Shift in Set-Top Box Market

The legacy cable TV set-top box (STB) market grew in 2009. However, growth slowed significantly last year and 2010 is on track to be the first year of negative growth since 2002, according to the latest market study by In-Stat.

Despite the overall market slow-down, some regional markets are poised for growth. Examples of these regional markets are Europe, where the demand for high-definition (HD) cable STBs is fueling growth, and Latin America, where the shift from analog cable TV to digital cable TV is spurring unit shipment growth.

"Even in a soft year, the cable STB market continues to offer solid growth opportunities for cable set top box manufacturers," says Mike Paxton, Principal Analyst.

This growth is particularly true for manufacturers target emerging regional markets or if they focus on high-margin product categories -- such as HD or PVR-enabled cable STBs.

I believe that high-growth opportunities could quickly migrate to the low-cost purpose-built IP digital video player market, as consumers continue to embrace alternative VoD pay-TV service delivery models.

In-Stat's market study revealed the following:

- Worldwide digital cable set top box unit shipments are forecast to decrease to 44.1 million in 2010, down 8 percent from 2009.

- Low-cost, digital terminal adapter (DTA) devices are having a big impact on the U.S. cable market. In-Stat is forecasting that over 7 million DTA devices will ship in 2010.

- The value of semiconductor components used in cable set top box products was $2.8 billion in 2009, only fractionally higher than in 2008.

- In 2009, the top three digital cable set top box manufacturers in total unit shipments were (in rank order) Motorola, Cisco Systems, and Technicolor (formerly Thomson).

- However, the combined market share of the top three manufacturers decreased to 41 percent of total worldwide unit shipments, down from 50 percent in 2008.

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