Set-top Box Vendor Consolidation Required to Meet Demands of Merged Operators Such as AT&T-DirecTV

The set-top box market has generally maintained historical leadership positions based on a cable, satellite or IPTV focus.Of the top five set-top box vendors—Arris, Cisco, Technicolor, Pace and Echosta—most are heavily weighted to one sector, or, in some cases, have robust proportions serving two of the three sectors.This definition won’t meet the needs of modern operators today who are looking at extending their services over multiple networks.

“This mature, yet fragmented market, in which the top five vendors account for about 37% of revenues, is ripe for further consolidation.We continue to believe that integration of historically separate cable and IPTV providers with satellite set-top OEMs would bear fruit in the increasingly hybrid set-top box world generated with acquisitions such as AT&T’s acquisition of DirecTV,” according to ABI Research practice director Sam Rosen.

Arris maintained the first spot in the global set-top box market during 2013 with $2.1 million dollars in set-top revenues and about 18.5 million units and a cable and IPTV focus, staying ahead of Pace, which is over-weighted on satellite with smaller cable and IPTV segments. Pace maintained its second position in revenues while falling behind Technicolor from a volume perspective.The set-top box divisions of Chinese consumer electronics (CE) manufacturers Skyworth and ChangHong, which could have been expected to gain significantly, largely remained flat as free-to-air markets did not expand as might have been expected.

“Pace performed a significant feat increasing revenues slightly with 10% lower volumes by focusing primarily on the high-end gateway market.This position, along with its focus on services, seems to be yielding fruit,” continued Rosen.

These findings are part of ABI Research’s “Set-top Box Market Shares” Market Data and can be found in the Set-Top Box and Home Networks Market Research.

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