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4K Set-top Boxes On The Rise Amid Overall Market Decline

Sales for 4K set-top boxes will buck an overall trend of decline in the set-top box market, quadrupling from less than two million units in 2015 to more than 7 million this year, growing by 46 per cent annually through to 2021, according to ABI Research.

The set-top box market as a whole, however, is expected to drop by about 9 per cent this year, to less than US$16 billion in revenue, with both pay TV and free-to-air boxes losing value.

“Digital transitions are taking longer than initially planned and the market is experiencing significant downward pressure on set-top box pricing,” Sam Rosen, ABI managing director and vice president, commented. “Hardware revenues will fall, but value through software and services remains an opportunity.”

Rosen stated that “providers should be looking to take on logistics and life cycle challenges, in addition to testing and integration, to help the overall market flourish as well as focusing on 4K and HDR colour set-top boxes” in the years ahead.

ABI notes that set-top box providers are increasing in scale as a result of recent mergers and acquisitions, including market-leader Arris taking over Pace, and Technicolor acquiring Cisco’s set-top box unit.

Huawei, at just more than US$1 billion in revenues, overtook a number of vendors, following a difficult year with drops of 25 to 40 per cent in revenues, including EchoStar and Humax.

China remains the largest market globally, while India came ahead of the US last year, with a failed digital cable transition spurring a large amount of satellite set-top box shipments, with ABI predicting India will continue to grow its set-top box shipments, likely surpassing China as shipment leader in 2018 or 2019.

“Significant market consolidation already occurred,” Rosen commented. “Operators worldwide are now carefully considering new opportunities to deliver video services, specifically through the use of streaming media adapters and adaptive bitrate, better known as ABR, IP-based protocols.

“It is important to note that satellite broadcast remains a significant factor in pay TV distribution, while terrestrial platforms, augmented by set-top boxes with some storage and advanced IP services, are becoming important for select telco operators who are backing away from licensing content.”

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