Cisco on Motorola's heels in IP set-top-box market

Overall IPTV and switched digital video equipment sales up 6% in 3Q08

CAMPBELL, California — The Internet protocol television (IPTV) and switched digital video (SDV) equipment market increased 6% sequentially in 3Q08 to $1.4 billion, reports market research firm Infonetics Research.

In its latest report, “IPTV and Switched Digital Video Equipment, Services, and Subscribers,” Infonetics lowered its long-term IPTV and SDV forecast due to an expected slowdown in IPTV subscriber growth and a decrease in cable operators moving to switched digital video. Annual overall growth will continue in the worldwide market through the downturn, but will grow in double-digit percentages rather than high triple-digit percentages, as it has in previous years.

“We still see growth coming from the telco IPTV sector because IPTV is one of the key ways telcos can hold on to their broadband subscribers and increase revenue per user, so providers will continue to roll out new networks or expand their existing networks. Meanwhile, the cable switched digital video segment took a hit in the third quarter when Comcast slowed its SDV rollout and shifted its capex focus to DOCSIS 3.0 rollouts. Still, cable MSOs will continue to introduce switched video capabilities into their digital TV networks, just at a slower pace than we expected prior to the economic downturn, which is forcing families to rethink their budgets,” said Jeff Heynen, directing analyst for broadband and video at Infonetics Research.

Other report highlights:

• In 3Q08, IP set-top boxes (STBs) account for 70% of the total IPTV and SDV equipment revenue
• IPTV middleware (content delivery platform) sales are up 21% in 3Q08, and video content protection software sales are up 14%
• In 3Q08, Motorola continues to lead the lucrative IP STB market, although Cisco increased its market share 6 points, putting them in a very close second
• In Asia Pacific, the IP STB market is hotly contested by Samsung, Motorola, Sumitomo, Cisco, and UTStarcom
• Harmonic maintains a strong lead in the worldwide IP video encoder market, leading all segments, including MPEG-2, and standard definition (SD) and high definition (HD) MPEG-4 encoders
• The competitive operator Iliad Group of France leads in the number of IPTV subscribers, with 3 million in 3Q08
• North America is the leading region for total IPTV and SDV revenue due to the fierce rivalry between telcos and cable operators, but Europe’s developed economy supports keeps it in a close 2nd

The report tracks 2 Wire, Advanced Digital Broadcast (ADB), Alcatel-Lucent, Amino, Celrun, Cisco Systems, Dasan Networks, Envivio, Ericsson (Tandberg), Harmonic Inc., Microsoft, Motorola, Netgem, Nokia Siemens, OptiBase, Sagem, Samsung, Sumitomo, Telsey, Thomson, Tilgin, UTStarcom, Yuxing, and others.

Infonetics’ report provides market size, market share, and forecasts for telco IPTV and cable IPTV and SDV equipment, including pure and hybrid IP STBs, integrated digital headend platforms, VOD and streaming content servers, IP video encoders, IPTV middleware and content delivery platforms, video content protection software, and universal edge QAMs. The report also tracks pure IPTV, hybrid IPTV/over-the-air, hybrid IPTV/QAM, and cable SDV services and subscribers.