Global Q2 STB revenue outlook a mixed affair

The boxless living room appears to be some way off: globally, set-top box (STB) revenue including IP, cable, satellite and DTT STBs and OTT media servers was up 4% sequentially in the second quarter of 2014, to $4.8 billion, according to Infonetics Research.

However, the market is expected to contract at a -0.05% compound annual growth rate (CAGR) from 2013 to 2018, when revenue will total $19.2 billion.

"The global STB market is in a fascinating period of mixed signals," said Infonetics' Jeff Heynen, principal analyst for broadband access and pay-TV. "While quarterly unit shipments are up, on a year-over-year basis shipments are down. And though nearly all STB product categories saw volume increases in 2Q14, satellite shipments continue a downward trend, while cable set-tops are growing due to an ongoing refresh cycle in North America and Europe."

In its report, Infonetics found that STB unit shipments grew 7% sequentially in the second quarter, but are down 3% from the year-ago period. Cable STB revenue specifically increased by 3% sequentially in Q214, and unit shipments grew 4% during this same period.

By 2018, satellite STBs are expected to contribute the majority of STB revenue, at 36%.

The firm found that ARRIS remains the worldwide STB market share leader, and gained almost two share percentage points in sequential quarters.

Meanwhile, OTT media servers are quickly becoming the STB of choice for pay-TV providers in emerging markets such as China, where free video content is abundant and service providers are looking to bundle live streaming video with their own broadband offerings.