Light Reading

Make Way for Gateways

Alan Breznick

Although they may still be relatively small in number, home media gateways are starting to make their presence felt in the pay TV market.

In two separate reports, analyst firms Multimedia Research Group (MRG) Inc. and Infonetics Research Inc. confirmed the growing industry interest in media gateways, which are centralized über boxes that can support multiple video and broadband services in the home. Both reports found that providers are seeking to deploy more gateways in response to consumer demand for more advanced video and home networking services, especially multi-screen video.

MRG, a unit of SNL Kagan , predicts that global shipments of home media gateway products will reach nearly 10 million units this year, up from 7.7 million units in 2012. As a result, it sees vendor revenues climbing to almost $3 billion this year, up from $2.3 billion last year.

Even so, MRG noted that gateway shipments will still account for just 4 percent of all set-top box shipments this year. However, the firm expects demand for the gateways to "increase significantly over the next few years."

With a hefty average sales price of about $300 per box, gateways should be a lucrative source of income for set-top makers. But that relatively steep price will also limit their penetration to high-income regions around the world, at least initially, MRG said. Specifically, the firm expects that "virtually all" gateway deployments "will be confined" to North America and Europe through 2015.

So far, "headed" gateways, which attach directly to TV sets, easily make up the lion's share of product shipments. MRG projected that "headless" gateways, which are more advanced boxes that don't hook up to TVs, will account for only 2 percent of all global gateway shipments in 2013. But many industry experts believe that headless gateways will overtake headed gateways down the line.

In its report, Infonetics projects that home networking devices, which it describes a bit more broadly as gateways and set-tops that integrate wireless and wired technologies to distribute video signals throughout the home, will generate substantially more revenue this year. The firm reported that global vendor revenue from home networking devices climbed to $5.4 billion in the first half of the year, up 6 percent from the second half of 2012. Devices using multimedia-over-coax (MoCA) technology, which ship primarily in North America, drove most of the growth.

Zeroing in on broadband data gateways, Infonetics found that residential gateway revenues rose 7 percent in the first half of the year on a sequential basis. The firm said such gateways, which combine the functions of modems and routers, "continue to cannibalize retail routers," depressing router shipments and revenues.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Blogger
11/14/2013 | 5:42:54 PM
Re: Costly, but...
That's true. It may be good value for what you get. But $300 is still a pretty stiff price to pay for a new video-related box in the home, no matter how souped-up it is. So there's no question that gateways will have appeal. The big question is whether they will be big mainstream products or just higher-end niche ones. The jury's still out on that.  
User Rank: Light Sabre
11/13/2013 | 12:27:26 PM
Costly, but...
You're right that $300 per box is costly, at leaston the surface. However, if one has already opted for video streaming and other data-intensive services, the $300 may seem to be little to pay if the box optimizes data needs for mutiple device users.

Late in the afternoon, the commuting college student and high school student could be home, each on a device or two like an iPhone and laptop (multiply by number of children on data-intensive devices), while a parent or two might be one or more of their own devices. Add to that a VOIP phone, and all of a sudden, one is more than happy to pay not to have mutiple devices freeze up or slow down to the point that they are unusable during periods of high demand.
Carol Wilson
Carol Wilson,
User Rank: Blogger
11/12/2013 | 2:34:53 PM
Virtual gateways
As this equipment gets more high function and thus more high cost, I'm wondering if service providers won't look for virtualized options - home broadband is one of the scenarios currently under discussion. 
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Centec on Ethernet Switching

11|26|15   |   09:58   |   (0) comments

Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (10) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (2) comments

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Samsung: No Sale of Wireless Unit
Dan Jones, Mobile Editor, 11/25/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Centec CEO James Sun talks to Steve Saunders about Ethernet switching and the white box revolution.
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.