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Don't Box Me In: Set-tops Expand

Although the vast majority of digital set-top boxes deployed in the U.S. market are lower-end models, the pressing demand to offer cable subscribers high-definition capability has sent box makers scurrying back to their white boards. At last week's BroadbandPlus (i.e., the new Western Show), the usual suspects were on hand to demo their latest marquee offerings; in many cases, there were so many features crammed into the boxes that they began to resemble nothing so much as digital Swiss Army knives.

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Perhaps no set-top manufacturer displayed more naked ambition than Pace Micro Technology, whose HD/DVR cable gateway prototype looked like something you'd find aboard the space station in 2001: A Space Odyssey. Like the Pace DC 755 model in development for Comcast Communications, the HD/DVR concept features an integrated DOCSIS cable modem, 300-plus MIPS processing power and support for all formats of HDTV. It also supports DigiCipher II conditional access as well as TV Guide's EPG and multiple middleware solutions.

David Novak, Pace's VP of marketing, said the 755 will ship sometime in late 2003. Although he didn't offer a price for the top-of-the-line unit, he characterized the box as "fairly expensive."

"We think the price of the silicon will drop between now and then," Novak said. "That should help bring the cost down significantly."

As for the unnamed HD/DVR concept, Novak said that building it out may prove to be a substantial risk, as there are no orders in hand. No release date has been set for that box, although volume shipments could begin sometime in 2004.

Scientific-Atlanta has plans for an updated HD unit of its own, says director of strategic marketing for subscriber networks Dave Davies. "We've been working on a follow-up to our Explorer 3100," Davies said. "The demand for HD is coming from all sides now."

S-A's new Explorer 4200HD gateway, due to begin shipping this month, combines a DOCSIS cable modem with HD capabilities, Davies said. It will also include a USB port, an optional DVI HDTV digital interface with HDCP high-bandwidth digital content protection and an optional IEEE 1394 digital interface with 5C copy protection capability.

Motorola also looks to make a splash with a combination box, said director of strategic marketing Bernadette Vernon. Its DCT-5200 box will be released next summer, making it the first fully realized HD/DVR box on the market.

"Between the holiday season and the Super Bowl [ABC will air Super Bowl XXXVII in hi-def on January 26, 2003], a lot of people are finding compelling reasons to invest in HDTV," Vernon said. "We've had third-party analysts tell us that the market share for HD could reach as high as 10% within the next few years."

Never one to be shut out in the cold, Pioneer Electronics (U.S.) will join the HD fray this January when it rolls out its Voyager 3510 HD box. It will also introduce a combination HD/DVR box, the Voyager 4000, in mid-2003. That set-top will come complete with an 80-gig hard drive and optional HD capabilities.

Although the market continues to slump - for the first time in six years, annual cable set-top box shipments and revenue have decreased - some analysts are certain that the backward trend is temporary. According to Kagan World Media research estimates, basic digital set-tops should be found in 10.3 million homes by 2006. Beyond those lower-end boxes, more advanced units could account for another 8 million homes in the same time period.

In terms of HD-capable boxes, Kagan indicators suggest that 6.7 million devices may be in use before Michael Powell's deadline comes and goes. But that may be a low-ball estimate. If HDTVs become the next "must-have" consumer device, that figure could easily double, the Kagan report concludes.

While no set-top maker will discuss pricing outside of a consumer electronics context, estimates for the higher-end HD units range from $300 to $500. In time, they will come down.

THE NEXT QUESTION:

*Are set-top makers getting too far ahead of themselves with their advanced product lines?

Technology Industry

Don't Box Me In: Set-tops Expand

Cable World, Dec 9, 2002

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