- A major factor driving growth of the global set-top box market is increasing popularity of high definition (HD) channels and increasing adoption of smart TVs.
- The satellite digital segment is expected to witness highest growth.
- China is expected to dominate the target market regionally.
The Global Set-Top Box Market was valued at around $17 billion in 2017, and is expected to register a CAGR of 4.3%.
Set-top boxes (STBs) are devices that connect TVs to an external signal source and transform the signal into video content that is displayed on the television screen. The term set-top box refers to devices used to transform a signal, from either cable or satellite, to connect a television with some external broadcasted signal source. The set-top box modulates broadcasted signals into audiovisual content that can either be displayed on a monitor or recorded.
Global Set-Top Box Market: Dynamics
A major factor driving growth of the global set-top box market is increasing popularity of high definition (HD) channels among consumers, coupled with increasing adoption of smart TVs. In addition, rising awareness pertaining to Internet-based set-top box devices such as IPTV and OTT, as well as increasing development and introduction of innovative products such as 4K UHD TVs, 3D smart interactive TVs, and OLED TVs are some factors further fueling growth of the global set-top box market.
Furthermore, increasing penetration of smart television units and value added services in urban as well as rural areas globally is further expected to boost revenue growth of the target market over the forecast period.
However, rising adoption of smart TVs, Apple TVs, 4K TVs, IPTV services, coupled with development of high-speed broadband infrastructure in developing countries is expected to create potential revenue opportunities for players in the target market.
Market analysis by Product Type:
On the basis of product type product type segmentation, the satellite digital segment is expected to contribute major revenue share, and is expected to maintain its dominance over the forecast period. The satellite digital segment is expected to witness highest CAGR of 4%, owing to picture quality of satellite digital type set-top boxes is high. Vendors in the market are investing in satellite digital type hardware to provide the latest technologies such as digital video recorder and traditional functionalities integrated with cloud services, which are other factors expected to drive revenue growth of this segment.
Market analysis by Application:
On the basis of application segment, the residential segment is expected to contribute major revenue share, and is expected to maintain its dominance over the forecast period. The residential segment is expected to witness highest CAGR of 4%, owing to high adoption of set-up box in households in developed and some developing economies.
Market analysis by region:
China market is expected to dominate the target market, and this can be attributed to growing demand for smart televisions owing to increasing purchase power and spending capacity of consumers, and introduction of HD and UHD channels are expected to drive revenue growth of China set-top box market. In 2013 for instance, according to National Bureau of Statistics of China, there were 228,94,000 cable radio and TV users, which increased to 23,458,000 users in 2014.
In addition, increasing awareness related to Internet-based STB devices, such as IPTV and over-the-top units are expected to create lucrative opportunities for set-top box manufacturers in the country over the next few years.
Moreover, growing popularity of IP television in the country, which involves transmission of traditional TV content over the Internet, is expected to support revenue growth of the China set-top box market over the forecast period. For instance, according to Oxford Economics, the number of IPTV subscribers increased rapidly from 10 Mn in 2014, to 60 Mn in 2016.
Presence of prominent players such as Skyworth Digital Holdings Ltd., Huawei Investment & Holding Co., Ltd., Apple Inc., and HUMAX HOLDINGS Co., Ltd., and others in the country is expected to result in rising adoption of set-top boxes over the next few years.
The market in the US is expected to account second-largest revenue share in global market. This can be attributed to increasing spending capacity among consumers in the country, coupled with early adoption of technologically advanced electronic devices trend are major factors driving growth of the US set-top box market currently. In addition, various OTT services offered along with set-top boxes such as Netflix, Amazon Prime, Viu, etc. is another major factor driving growth of the market in the country.
The market in India is expected to contribute significant revenue share in the global market, owing to introduction of HD channels, rising adoption of smart televisions, increasing awareness regarding Internet-based STB devices, and growing demand for high quality audio and video content are among other factors expected to support revenue growth of India set-top box market.
In addition, growing demand for televisions in the country owing to increasing spending capacity, rapid urbanization, and rising standard of living of individuals in rural areas are major factors expected to drive revenue growth of India set-top box market over the forecast period. In 2016, according to India Brand Equity Foundation, the television market in India was valued at $9.23 billion, which increased to $8.28 billion in 2015.
Growing R&D activities by manufacturers in the country for development of hybrid DTH set-top box is expected to support revenue growth of India set-top box market. In April 2017, Bharti Airtel announced launch of Internet TV – a hybrid set-top box – which enables access to online content which can be viewed and streamed via the TV, and supports 500-plus satellite TV channels.
Furthermore, Mandatory government regulations regarding usage of registered set-top boxes rather than wired cable television broadcast channels is expected to drive revenue growth of the set-top box market in the country.