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Rumor: AT&T Rethinks Set-Top Chips

Not to take away from AT&T Inc. (NYSE: T)'s upcoming software-enabled features for its U-verse service, but the hottest IPTV rumor today has something to do with hardware instead. (See AT&T Touts the U-Verse Reality and A Look Back at U-verse .) AT&T is readying a new U-verse IP set-top box for launch this fall to accommodate all its software updates, according to a Light Reading source. The STB will reportedly be based on Broadcom Corp. (Nasdaq: BRCM)'s 7405 system-on-a-chip and an updated version of Microsoft Corp. (Nasdaq: MSFT)'s Mediaroom.

Broadcom completed Mediaroom client integration at the end of last year. To date, it is the only chipset vendor to have completed the process. Fellow SOC vendor Sigma Designs Inc. (Nasdaq: SIGM) powers AT&T's U-verse STBs, but even it isn't listed as an ecosystem partner of Microsoft.

The Broadcom SOC can enable advanced features for IPTV and, while 3D wasn't listed as one of them in the release on Broadcom's certification, the feature update is presumably the service driving AT&T's need for next-generation STBs.

At AT&T's media demos today in Atlanta, the carrier was showing off 3DTV, enabled through a software update, but the demo was only of programming. Any graphics, menus, or applications it'd want to include down the road would likely necessitate more computing power than today's chips can offer.

In April, Broadcom president and CEO Scott McGregor said he expects Broadcom-based IP STBs to begin shipping in volume in multiple top-tier carriers throughout the year. He also noted that Broadcom's 3D technology is in a leadership position in terms of bandwidth savings and maturity, "allowing MSOs, carriers, and consumer electronics brands to rapidly deploy products that offer 3DTV capability."

Of course, there are other Mediaroom customers across the globe that could be candidates for the Broadcom boxes too, but AT&T seems the most likely to our source, who has ties to set-top maker Motorola, a U-verse set-top supplier.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

Pete Baldwin 12/5/2012 | 4:34:32 PM
re: Rumor: AT&T Rethinks Set-Top Chips

From Sigma Designs' earnings call yesterday -- the prepared remarks include a mention of losing exclusivity in media processor chips, probably in the second half of this year...

sarahthomas1011 12/5/2012 | 4:34:31 PM
re: Rumor: AT&T Rethinks Set-Top Chips

Sounds like Sigma easily could get phased out over time...

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