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Daily News

Set-Top Box Vendors to Face Heated Competition from CE Vendors
Aug 22, 2003
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There was a time when the set-top box (STB) was simply a device - owned by the cable operator and leased by the consumer —through which cable programming could be viewed at home. But, according to New York, U.S.-based Allied Business Intelligence (ABI), this has started to change.

The research firm reports that Cox and Scientific Atlanta have begun to move the set-top box into the retail market in Phoenix, AZ, U.S. Additionally, an agreement pending at the FCC between top cable companies and consumer electronics (CE) makers could exacerbate this trend.

The "Plug & Play" agreement, as it is called, pushes for a standard allowing cable subscribers to directly connect integrated digital TV (DTV) receivers to their cable systems and receive basic and premium (one-way) digital programming. If approved by the FCC in the coming weeks, it will afford various players, including CE vendors, the opportunity to try their hands at marketing their present and future CE products independently of the offerings of the local cable provider.
ABI predicts that by the end of 2004, just less than 1 million high definition enabled set-top and satellite receivers will be in use in North America. By the end of 2005, it predicts that more than 15 million personal video recorder enabled set-top and satellite receivers will be in use worldwide, according to a new study.

"The traditional set-top box (STB) vendors will start to build solutions that are retail consumer-friendly, while the traditional CE vendors will encroach onto the set-top turf by offering DVD recorders, game consoles, and PVR devices that are digital cable-ready," explains Vamsi Sistla, a senior analyst with ABI. "This competition will be healthy for consumers and will foster new and interesting improvements in home entertainment."

"If the STB industry incumbents do not adapt to changing technology and business models then CE leaders such as Sony, Toshiba, and Samsung, with years of consumer marketing experience and broad retail distribution channels, are positioned to steal their market share," continues Ms. Sistla. "If CE vendors offer more attractive and cheaper solutions, then MSOs will find value in dealing with the CE leaders rather than with the set-top box industry incumbents."

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