China's high-definition set-top box or HD STB industry is on the upswing amid expanding applications in various products, growing content and overall broadcast technology enhancements.
Despite the economic slowdown, worldwide shipments rose in 2009, fueled largely by the upsurge in HDTVs and available programs. A 23 percent CAGR is expected between 2008 and 2013, according to iSuppli, by the end of which HD models are expected to dominate regular STBs.
China currently accounts for 80 to 85 percent of global output. Most makers are optimistic about the product line, and anticipate increased orders in coming months. Many are projecting sales to climb this year, particularly because of the upcoming FIFA World Cup and its potential HD viewers.
Mico Electric (Hong Kong) Ltd registered 50 percent growth for its HD STB line last year, while Shenzhen Xindasheng Electronics Ltd saw a 20 percent increase.
Shenzhen Coship Electronics Co. Ltd, which provides HD DVB-T, DVB-S/S2, ATSC and ISDB-Tb models, has expanded its HD STB business in Europe, Australia, Brazil and Hong Kong.
The booming market has also attracted many new entrants, including Shenzhen SDMC Microelectronics Co. Ltd, which used to design STB chipsets. The supplier launched its first finished STB products in 2009.
Another newcomer, Makena Electronic Shenzhen Co. Ltd introduced HD STBs in May. The line has since taken 80 percent of the maker's total STB shipments.
Products & prices
The growing applications and supplier base and ensuing competition are pushing HD STB product development efforts to a new level. Many manufacturers are working not only on R&D but also on the upstream supply chain and even downstream sales networks.
Following the EU's new ecodesign directive regarding energy-using products, nearly all HD DVB STBs from China for export to the region now meet the requirements for simple STBs.
Most HD models from the country already have a built-in auto sleep mode. Power consumption has been reduced to below 8W in active mode or 1W in standby. Some units, excluding those integrated with an HDD, use less than 6 or 0.5W when operating or in standby mode.
Makers are taking R&D measures further by exploring low-power chipsets, and improved power control and motherboard circuit designs to conserve energy.
China suppliers have controlled the additional cost of eco-friendly HD STBs under $1 or $0.50 for SD versions.
For the UK market, meanwhile, suppliers are offering HD DVB STBs that support MHEG-5 applications enabling interactive TV services.
DVR-ready units, which support external HDDs and provide program recording and time-shifting functions, have also become standard. Makers can integrate the HDD depending on buyers' specifications.
Dual-tuner combo STBs that can receive two different standards of TV signals are growing more popular, especially DVR models that support simultaneous playback and recording. This product type includes the HD ATSC+DVB-S2, ISDB-Tb+DVB-S2 and HD DVB-T+DVB-S2 variations.
For some makers, R&D focuses on customizing products for specific applications or markets. Beginning June 2009, for example, suppliers launched HD STBs compatible with the SBTVD/ISDB-Tb standard used in South America, particularly Brazil. Based on Japan's ISDB-T, the specification adopts MPEG-4 as the video compression system and an application called Ginga as middleware that allows interactive TV programs.
|Products & prices|
Mainstream HD STBs from China are based on the DVB-T or DVB-S2 standard. Europe is the key export market, except for ISDB-Tb and ATSC models, which are targeted at South and North America, respectively.
Compliant with HD DVB-T/S2, MPEG-2/4 and H.264, DVB-S2 and ISDB-Tb models have more than 1,000 channels, teletext, OSD, EPG, USB playback and PVR functions.
Solutions are sourced from ST, Broadcom, Ali, Mstar and Celestial, although some makers are exploring new less-expensive options due to increasing price competition.
HD STB tuners, meanwhile, are usually imported from Sharp, ALPS, NEC and Philips. Some entry-level models also use locally made versions.
Low-end models are typically made of plastic, while upscale units use metal panels or housings for efficient cooling.
Prices depend on the product's solution, materials and add-on functions. Quotes are currently pegged at about $30 to $50 for DVB-T, between $50 and $70 for DVB-S2 and $50 to $80 for ISDB-Tb STBs. Dual-tuner or HDD units go for between $70 and $100.
Falling solution costs, mass production and competition have been pushing down prices in recent years. Makers expect further reductions of at least 5 to 10 percent in the next six months as more suppliers join the line.
China has more than 200 STB makers, nearly 30 percent of which have launched HD models. The percentage has tripled in the past couple of years when only tier 1 manufacturers had the R&D capability for HD STB production.
The current supplier base can be divided into three levels. The first one includes major companies with an annual capacity reaching 5 million units. Makers in this range, including Shenzhen Coship, Jiuzhou, Skyworth and Konka, provide high-end customized models and aftersales services.
Tier 2 suppliers specialize in STBs. They usually have distinctive product development techniques depending on the customized models. Mico, Shenzhen Xindasheng and Shenzhen SDMC are in this group. Shenzhen Xindasheng used to be a STB solution supplier, while the last company also designs STB chips.
The third category refers mainly to factory- or assembly-only operations, which source mature solutions and components from third-party providers. Companies under this classification have limited or no R&D capability. Most offer models, particularly standard-feature DVB-T STBs, at much lower prices than makers in tier 1 or 2.
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