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Cable STB revenues particularly drop in second quarter as "post-STB" era begins in North America and Western Europe.
November 4, 2013
Despite growing demand for digital set-top boxes in emerging markets, set-top revenues for equipment suppliers fell in the second quarter, particularly for cable STB vendors.
In its latest report, Infonetics Research Inc. found that global STB revenues slipped to $4.3 billion in the second quarter, down 3 percent from $4.4 billion in the first quarter and down 9 percent from the year-ago total. The first quarter figure was also down from the same period in 2012. (See Cable STBs Buck the Trend.)
Cable set-tops fared particularly poorly in the spring quarter after starting off the year well, Infonetics reported. Cable STB revenues plummeted 14 percent from the first quarter even as unit sales held their own, coming in flat.
Infonetics said cable STB revenues fell even though unit sales stayed even because there were more single-tuner standard-definition boxes shipped to such emerging markets as China, India, and Latin America as those formerly analog TV markets embrace digitization. At the same time, there were fewer more advanced digital set-tops sent to North America and Western Europe, which have already gone nearly all-digital.
Jeff Heynen, principal analyst for broadband services and pay TV at Infonetics, said researchers are "seeing the market bifurcate along geographic lines." He argued that North American and Western European service providers are now entering "a post-STB market," where a saturated pay TV business is prompting providers to switch from traditional set-tops to new video gateways in search of fresh growth.
The STB market is in the midst of a series of significant technology shifts, and these changes are resulting in ebbs and flows in shipments on a global scale, with individual markets swinging each quarter's performance. There are real unit shipment declines occurring in North American and Western Europe that won't be offset by growth in Asia Pacific and Latin America until 2014.
In the closely watched vendor sweepstakes, Pace plc surged to the top in market share in the second quarter, leapfrogging well over Cisco Systems Inc. (Nasdaq: CSCO). While Pace's STB revenues soared, Cisco saw its revenue fall sharply from the first quarter, when it hit a record high, according to Infonetics. Arris Group Inc. (Nasdaq: ARRS) took over third place, boosted by its acquisition of Motorola Home earlier this year.
— Alan Breznick, Cable/Video Practice Leader, Light Reading
Cable/Video Practice Leader, Light Reading
Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.
As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.
Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.
He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.
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