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STB market solid, TV sets slump
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STB market solid, TV sets slump - 15-November-2008, 04:10

STB market solid, TV sets slump

As economic woes increase, suppliers in the consumer electronics and digital TV markets are expecting a difficult 2009. IMS Research is forecasting that, setting aside the US DTV converter box program, that set-top box revenues in the region will decline 5 per cent from 2008 to 2009 and that volumes will actually rise, albeit at a relatively weak 9.3 per cent annual rate over the same period. Globally, IMS Research is forecasting a 2 per cent decline in revenues from 2008 to 2009 on 5 per cent volume growth.

Anna Hunt, IMS Consumer Electronics Research Director, states, "While many consumers will very likely cut back on their entertainment budgets, TV remains a relatively cheap form of entertainment. Nonetheless, we are expecting ARPU growth to slow or even decline during the period. As a result, set-top suppliers are expecting considerable pressure on pricing in 2009, and low-cost segments such as cable DTA adapters could see considerable growth during the next two years."

However, according to Stephen Froehlich, a senior analyst in IMS Consumer Electronics group, "The assumed recession hits the TV set market at a particularly critical juncture, destroying a major profit opportunity for TV manufacturers. By the time the economy recovers in 2010 or 2011 and consumers are willing to buy more expensive sets, the high-performance (120 Hz, high contrast ratio), LCD TV market will be much more commoditised than it is now, removing a major profit opportunity for competitors in the luxury TV segment."

IMS Research expects global TV set revenues to be off by 11 per cent in 2009, down to $90 billion from $101 billion in 2008 on a volume decline of just 2 per cent.

Froehlich continues, "TV suppliers are cutting costs in their designs for now but are also working feverishly to find ways to add new value to their sets, exploring features such as Internet video and 3D goggle support. However, our current analysis is that neither of these are likely to be major profit generators for anyone except the studios."
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