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STB Market To Stay The Course In 2002 Despite Overproduction, Inventory Issues

Study by Allied Business Intelligence Upbeat for New Year (January 14, 2002)
From 1999 to early 2001, digital cable set-top boxes were being built faster than MSOs could sign up new customers, but vendors overestimated how quickly customers would switch over to digital and found themselves with significant inventory. Therefore, set-top box vendors, particularly Scientific-Atlanta, sharply curtailed their production runs of digital set-top boxes.

Nevertheless, the industry is preparing for a rebound as cable MSOs are still getting large numbers of customers migrating to digital tier service. Hence the overall market will continue to show significant growth. Worldwide digital set-top box sales (including cable, satellite and terrestrial platforms) are projected to reach 45 million units in 2002, up from 36 million in 2001, and 28 million in 2000. Global sales are expected to reach 88 million boxes in 2007, with market revenues $13.9 billion.

"Digital services will spur vendors to build more powerful boxes and more powerful boxes will allow operators to deploy more compelling services. The first trick is to make sure that these two forces work in tandem," said Joshua Wise, Allied Business Intelligence (ABI) Senior Analyst and author of the report. "The second trick is to make sure that the consumer stays in the picture too."

Digital set-top boxes, which had started along a path towards becoming home gateways, have been scaled back slightly to reflect current hesitations in putting too many features into the boxes too soon. Set-top box vendors, have begun offering mid-range boxes that would allow operators to roll out a few advanced services while maintaining some level of profitability and at the same time keeping an eye to the future of interactive TV and the features that come with it.

The new ABI report "Digital Set-Top Boxes: Satellite, Cable and Terrestrial Opportunities" discusses the shift towards digital set-top boxes across satellite, cable, and terrestrial platforms. Projections for these platforms are further segmented on a geographic basis. Also provided is an analysis of key set-top box vendors. The report details the related operating system and middleware markets, along with an examination of advanced interactive services.

Allied Business Intelligence Inc is an Oyster-Bay, NY-based technology research think tank and consultancy that offers expert advice and research on wireless, broadband, and emerging technologies. Details can be found at

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Related Keywords:DTV Professional, STB, set-top box, study, 2002 trend,

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