ABI: Set-top box market contraction demands hybrid STBs, streaming services

Oct. 3, 2022
Hybrid box types, IPTV expansion, and greater emerging market demand should offset legacy cable and satellite STB shipment decline, posits new analysis in the latest report from ABI Research.

According to global technology intelligence firm ABI Research, set-top box (STB) shipments continued to decline in 2021, driven by a combination of factors including: migration to streaming; market saturation; consumer cost-cutting measures; and supply chain constraints.

The firm's analysts report that subdued demand will result in a contraction of global annual STB shipments from 203.1 million in 2022 to 195.2 million in 2025.

Thereafter, STB shipments are projected to level off around the 194 million mark between 2025 and 2028. 

ABI added that the declining market for traditional STB in mature markets will be compensated by the arrival of hybrid box types and the strength of the recovery in emerging markets.

Andrew Spivey, industry analyst at ABI Research, advised: 

“Vendors must adapt to remain competitive in a contracting market. To counter the competition from streaming, particularly in mature markets, vendors should look to develop more hybrid set-top boxes that integrate streaming services. Furthermore, vendors should explore incorporating additional value-added features into STB units to further raise their value proposition to the consumer.”

A shaky stability

According to ABI Research, in 2021 STB vendor market shares continued to remain relatively stable -- despite the industry experiencing significant market disruptions and undergoing a downward trajectory. 

Interestingly, Huawei retained its mantle as the largest overall STB manufacturer by a significant margin and bucked the trend by exporting 12% more shipments in 2021 than the previous year. This enabled the company to capture an even greater share of the market, said the analyst. 

Meanwhile, Skyworth, the second largest vendor, grew its market share by only 0.9%, while the third largest vendor, Technicolor, saw its share decrease by a similar amount. 

Although the pandemic recovery allowed vendors to ship more units in 2021 compared to 2020, ABI's analysis noted that logistical constraints, overall dampened demand, and migration to streaming in mature markets meant that the shipments of virtually all other vendors continued to decline in 2021.

In mature markets, the analyst forecasts that demand will be driven primarily by STB churn, which is becoming more frequent as operators compete in an increasingly saturated environment. 

Spivey concluded:

“To appeal to these consumers, vendors must develop more advanced hybrid box types. It is important that vendors also appreciate the longer-term shifting regional demand for STB equipment and adjust their production roadmap to meet the specific requirements of these markets.".

The source of the analyst finding is ABI Research’s Set-Top Boxes and CPE market data report, part of the analyst's Wi-Fi, Bluetooth & Wireless Connectivity research service, which provides research, data, and analyst insights. 

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