Set-top market set for gradual decline, Cisco “good deal” for Technicolor

Global set-top box sales fell by 2% last year to 275 million units, highlighting minimal growth or cutbacks in emerging markets including Brazil, Russia, India and China, and will continue to fall gradually, highlighting the need for consolidation moves such as Technicolor’s recent deal with Cisco, according to Futuresource Consulting.

The company predicts that shipments will remain in excess of 250 million units for each year until 2019, when the market will be worth about US$17 billion (€15 billion), down from the current US$20 billion.

Futuresource said that the smaller modem and gateway business would remain promising, thanks to growing dependence of consumers on broadband, home networking and managed services.

According to Futuresource, Technicolor’s acquisition of the Cisco set-top business will leave Technicolor accounting for about 13% of the global set-top market, with a combined share of about 30% of the key North American market.

Cisco’s total connected device sales are expected to total US$1.6 billion in 2015, which will double Technicolor’s connected home business in a full year. Technicolor is expected to ship over 60 million devices worth about US$3.3 billion this year.

“At US$600 million, Technicolor seems to be getting a good deal – an incremental $1.2 billion in STB sales and access to key North American cable and IPTV accounts, bringing its worldwide share up to 13% (15% of Pay-TV),” commented Jack Wetherill, Senior Market Analyst, Home Electronics, Futuresource Consulting.

“It also gets Cisco’s Cable Modem business to complement its own Broadband CPE unit, lifting its worldwide share up to about 15%.”