SAN JOSE – Although set-top boxes have been around in one form or another for more than 30 years, the industry is far from settled, says iSuppli Corp. STBs should remain one of the most dynamic areas of the electronics industry for at least the next decade, and quite possibly beyond, according to the research firm.
Over the next few years, expanding box capabilities will drive much of the STB market. For millions worldwide, HD and DVRs are becoming such a part of consumer lives that by 2012 more than 70% of digital STBs shipped are expected to integrate support for one or both of these technologies, up from about 35% in 2007, says iSuppli.
“DVRs are cheap to integrate into STBs because hard disk drive costs have plummeted,” said Jordan Selburn, principal analyst for set-top boxes for iSuppli. “With the street price of storage just pennies per gigabyte and falling daily, the time is not far off when video storage hardware, whether at home or remote, will be both essentially limitless and virtually free.
“HD falls into a similar category as DVRs,” Selburn said. “HD video processing chips are migrating to 65-nm semiconductor manufacturing technologies, causing their incremental costs to drop compared to standard-definition devices. HD display prices are falling rapidly as well. iSuppli forecasts that more than 125 million of these displays will ship in 2008, and customers will demand HD content to watch on their new televisions.”
With a perfect storm of lower-cost HD technology, increasing HD content and greater high-speed Internet access, HD will become the mainstream resolution by 2012, says iSuppli. This is likely to be a one-time transition, however. While companies are beginning to develop the so-called quad definition displays with twice the resolution of HD, most consumers will never need to adopt this technology.
The STB evolution won’t stop when HD and DVRs become the norm, however. In the long term, media hubs and home gateways are destined to supplant today’s one-box-per-set approach. Not only will this lower costs, it will enhance the user experience by serving video to all displays in a home from a centralized location, says the firm.
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