A report from the In-Stat research group indicates 2010 will be the first year of decline for set-top cable boxes since 2002. The trend follows a continued slowdown through all of 2009, even though the market still saw net growth last year.
Specifically, global set-top box sales dropped 8% so far in 2010, with sales numbers predicted to drop from 47.9 million down to 44.1 million.
“Even in a soft year, the cable set top box market continues to offer solid growth opportunities for cable set top box manufacturers,” said Mike Paxton, In-State Principal Analyst, in a statement. “This is particularly true if manufacturers target emerging regional markets or if they focus on high-margin product categories like HD or PVR-enabled cable set top boxes.”
The cable set-top box market in Europe and Latin America are both growing due to high demand in Europe and a migration from analog to digital cable in Latin America. Both markets are expected to see strong growth in 2010 and into the future, even though set-top boxes may struggle in a developed or saturated market.
The three leading set-top box companies, Motorola, Cisco Systems and Technicolor, which controlled 50 percent of the market in 2009, saw their shared market control drop to 41 percent.
It’s discouraging to see slower sales in 2009 and negative growth in 2010, but the set-top industry still doesn’t need to panic too much. Although there is competition in the home entertainment market, digital terminal adapters and similar newer technologies will see increased growth.
I’m interested to see how manufacturers try to adjust to the changing market so that set-top boxes are able to attract new users in North America and Europe. There was previous concern regarding market over-saturation, but an In-Stat report released last month indicated HD personal video recorders will see significant growth. If HD PVRs are expected to see growth, as In-Stat believes it will happen in the years to come, set-top boxes will still have a chance to mature further.
Consumers could also be opting for media players and other set top boxes instead of cable boxes. Products like Roku players, Apple iTV, the Logitech Google TV box, the Boxee box and others could put a big dent in high-end cable box sales.