The trend towards a move from hardware to software in global broadcasting continues as set-top box shipments are on track to reach 273 million in 2016, up just four million year-on-year, says research from SNL Kagan.
In addition to the modest growth of satellite units, the report also showed that cable shipments are expected to increase as strongly in 2016, while demand for DTT and IP STBs remains relatively flat. Yet even though there will be a unit volume increase in 2016, the research also revealed that STB revenues were trending lower. High-volume set-tops are continuing to experience declining ASPs, primarily due to production efficiencies and decreasing component prices resulting in global STB revenues to be worth $16.4 billion. This would represent an annual decrease of 6%.
Looking to the near future, SNL Kagan believes that demand for STBs will rise slightly over the next year, with unit shipments reaching 275 million in 2017. Yet unit shipments are forecast to begin slipping in 2018 due to slowing growth in pay-TV households and the increasing use of alternative devices including smart TVs and streaming media devices.
SNL Kagan projects that total STB unit shipments to decrease further into 2019, even though it forecasts demand for STB products will remain robust for the next several years. It sees global shipments exceeding 261 million in 2020.
Regarding which companies were driving the market, SNL Kagan calculated that Huawei is now the world's largest STB manufacturer, replacing Technicolor. Huawei shipped an estimated 26 million units over the last 12 months, outpacing Skyworth by a million units. Technicolor finished third in total market share after seeing demand for its satellite boxes decline slightly during 2015. ARRIS finished fourth after experiencing a 13% drop in estimated annual shipments, a decline that was mostly due to softening demand in North America for lower-end cable boxes. Pace, Changhong and Yinhe rounded out the top seven manufacturers.