ABI Research Considers New Generation Set-Top Boxes: Is the Home Media Center Nearly Upon Us?

Business Wire, May 11, 2005

OYSTER BAY, N.Y. -- The market for set-top boxes -- the consumer's main point of connection to cable-based services -- is huge, and will remain so for some time. But the shape of the STB's next generation replacement or evolution is already discernable, and it's called the Home (or Broadband) Media Center.

The idea, according to ABI Research principal analyst Michael Arden, is to combine a number of electronic devices in one package. STBs, cable modems, personal video recorders, computer interface, and telephone connection boxes are all likely candidates, and plans even include interfaces for controlling household heating and appliances.

Motorola has media-center devices on the market and, says Arden, several other vendors are testing the water.

"However," he cautions, "products like these are not going to be snapped up in large numbers immediately because consumers are largely unaware of them." They're also more expensive than today's "simple" STBs; there's a question mark over the level of interactivity they will offer; and there is an inherent risk in building a device which "does everything, but nothing very well."

That is why ABI Research is skeptical about some vendors' plans to incorporate CD/DVD players in their home media centers. They won't offer the same functionality or quality as stand-alone units, they won't generate easy profits, and they will be unpopular with entertainment content owners. Arden believes that home media centers may start to replace STBs in the United States around 2008, but that the process will start later in other parts of the world.

The evolution of the STB and many other topics are dealt with in the latest edition of ABI Research's regular step-top box studies, "Set-Top Box Market Development for CATV, DBS, DTT and IP." It forecasts the progress of early attempts to create standards for STB design, allowing universal plug-and-play. It also considers digital cable-ready TVs and dual tuners, and contains SWOT analyses for the cable and IP markets.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call 1.516.624.2500.