Abstract

Products Likely to Develop along Two Lines

In the future, digital cable STBs will develop along two lines. At one end, there will be cable STBs with basic reception capability. At the other end will be high-end products with advanced capabilities. Basic products will mainly be shipped to developing nations such as China and India. There are large numbers of cable TV subscribers in these countries, and the premise is that digital cable STBs should not require current subscribers to replace their TVs to watch digital programs. But because average incomes in these places are relatively low, local MSOs do not provide many interactive capabilities or services. Therefore, in these areas, basic products will be the mainstream.

In developed nations, shipments of digital cable STBs will mainly be for replacement demand. MSOs in these locations will provide more services, pushing subscribers to upgrade to more advanced models. In the United States, Japan and other locations, legislation will be passed requiring TV sets to have digital signal reception capability and be designed for use of CA interfaces. The market for basic cable STBs in these areas will gradually shrink.

High-End Products to Integrate More Capabilities

In the future, high-end digital cable STBs will not only provide simple TV signal decoding, but will also develop along the lines of consumer, communication and computer capabilities. In the consumer area, in addition to existing DVR, functions will gradually increase to include DVD playback and capabilities for surround-sound home theaters and home entertainment centers. In the communications area, products will use existing broadband networks to provide VoIP, videophone, home monitoring or other services. In the computer area, products will become gateways for home broadband networks, providing cable or wireless Internet access capability.

Based on current digital cable STB hardware structures, for any system to support so many functions, a separated solution must be adopted. Such a system would, in addition to a main CPU that executes ordinary user applications, need other specialized chips to manage DVD playback and broadband. The advantage of this sort of structure is that it is easy to modularize. However, integration of software and hardware is more difficult. Currently, cable STB manufacturers such as Motorola and others have started adopting a PC structure, using high speed CPUs with Linux or Windows operating systems to handle most system functions, while graphics and IO are handled by the Northbridge and Southbridge. It is likely that an increasing number of digital cable STBs will adopt this kind of structure.

Competition to Intensify

With the creation of the DVB-C and OpenCable specifications, digital cable STBs will gradually transform from closed into open systems. Second-tier manufacturers, seeing this opportunity, have started using advanced products and outstanding designs to win market favor. The first-tier companies are mobilizing their technology advantages as part of a strategy to define new specifications and applications with large MSOs, thereby strengthening the advantages of their own terminal products.

With the trend for CA in terminal products to modularize, the existing first-tier cable STB makers may gradually lose market share for basic cable STBs. For the second-tier companies, however, this situation on the contrary is a great chance to enter the market. With the trend toward integration of DVD and other multimedia capabilities, it is expected that consumer electronics brands and PC companies will eventually aim to take a piece of this large market.

Appendix

Glossary of Terms

List of Companies