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Satellite STB Shipments To Fall Below 50 Percent in 2008

By | August 13, 2008
      [Satellite News 08-13-08] Set-top boxes (STB) for the satellite market will account for less than 50 percent of total unit shipments in 2008, according to U.S. research firm In-Stat expects.
          About 80 million STBs for satellite pay-TV services will be shipped in 2008, about 46 percent of the expected total of 175 million STBs delivered. In 2007, satellite STBs accounted for 77.5 million of 143 million units, according to ‘”The Global Digital Set Top Box Market,” released by In-Stat in July.
          “We are projecting that while satellite STB shipments will still be growing, they are going to dip to less than 50 percent of total unit shipments, and that will be the first time that has happened since we have been covering this market,”     Mike Paxton, principle analyst for In-Stat, told Satellite News. “That does not underline a trend that the satellite STB market is weakening. What that is, is the impact of other digital STBs, their unit shipments are increasing.”
          Satellite STBs also lost the top spot in producing the most revenue for operators, Paxton said. “It was the first time since the mid-1990s that satellite STBs were not the most valuable in terms of revenues,” he said. “Last year, that went to cable STBs, which was something new and unusual. This changed because on the cable side, the average price of the STB to the cable operator is still about $200, whereas with satellite it is still well under $100.”
          However, the STB market remains a lucrative market as digital TV services continue to proliferate around the globe. “The market is still growing faster than we anticipated in terms of total unit shipments,” said Paxton. “We are talking about total numbers of digital STBs of over 140 million last year and around 170 million this year, so the growth is still very robust.”

      Satellite Set Top Box Unit Shipments

      2004 62.6 million
      2005 71.2 million
      2006 74.4 million
      2007 77.5 million
      2008 80.1 million
      Source: In-Stat Research

      Other Findings

      Despite a major push in terms of new advanced boxes with personal video recorder (PVR) functionality, there has not been a huge increase percentage-wise in terms of the boxes shipped to the satellite sector with these capabilities. “The growth there has been solid, but it is leveling off,” Paxton said. “The satellite sector is the largest in terms of PVR products that we track. We have seen that for the last three years. It is now over 7 million units a year, so about 10 percent of total satellite STBs are coming with a hard drive right now. … We expect it to grow again this year to over 8 million, but again, what we are seeing in terms of the PVR market is that there are a lot of other STBs integrating hard drives, so that is eating into the overall market share of satellite STBs.”
          The hybrid STB market also is provoking interest from manufacturers, particularly as satellite operators look to bring an IP capability to their STBs. “The hybrid boxes are very hot for the manufacturers,” Paxton said. “We are seeing increased interest from consumers, particularly in Europe. This is not something that is driving the market in Asia. There is a lot of interest in Europe for these products. There is a lot of interest in it, particularly from the manufacturers. Manufacturers want to know if there is enough content out there to drive these shipments of these STBs.”
          Other markets that could prove attractive to satellite STB operators include the free-to-air arena, said Paxton. “We are looking at India as a very interesting market as there is great growth potential there. We are seeing millions of units shipped into that market,” he said. “We are also looking closely at China which is a fairly substantial market for FTA boxes, although most of those are illegal. If that market ever stabilizes in terms of regulatory issues it is going to be a huge growth driver for this market. But what is still amazing in the FTA market is the strength in Eastern Europe and the Middle East. It is hard to track the numbers of boxes being shipped. When we speak to those component vendors, there are incredible numbers of boxes being shipped to places like Iraq, Lebanon and Saudi Arabia. There is a very interesting story going on here.”

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