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Cisco wins big in India as Chinese STB manufacturers surge

Cisco won significant standard definition (SD) set-top box (STB) business in India in the quarter ending 26 January 2013.

According to analyst firm ABI Research, Cisco shipped 1.3 million boxes in the fourth quarter compared with 850,000 in the third quarter, with a large portion of the increase coming from India.

Cisco CEO, John Chambers, said: “We have been more selective in the business we are taking in terms of set-top boxes and the lowest margin set-top box business in particular.”

Sam Rosen, practice director at ABI Research, said: “Cisco has been able to retain attractive margins delivering STBs in India because the engagements are based on end-to-end services. These engagements include Cisco headend equipment [cable modem terminations or CMTS], middleware, and conditional access systems in addition to the STBs."

Chinese set-top box manufacturers ChangHong and Jiuzhou surged in unit shipments in the third quarter of 2012, and together grew 66% sequentially to nearly 5 million units from 3 million in the prior quarter. The tracked market grew approximately 10% worldwide. ChangHong primarily serves the Asian markets, while Jiuzhou has more of a mix of domestic and international business.

“Asian market strength within the STB sector is no surprise,” said Rosen. “North American and Western European markets are largely flat as Asian markets grow and African markets are expected to open up in the next few years. Western manufacturers are using end-to-end strategies, as shown by Cisco, while Asian manufacturers are operating at lower margins and aiming to compete on price within low-ARPU Asian markets.”

These findings are part of ABI Research’s set-top box database.

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