While it is probably too early to sound the ever-waiting death knell for the traditional set-top box, the next big piece of consumer premises equipment is about to explode, according to research from IHS that predicts multimedia home gateway (MHG) global shipments will rise by a factor of more than 100 from 2011 to 2016.
According to IHS, global MHG shipments will hit 9.6 million units in 2015 and 2016. That compares to just 90,000 that were shipped in 2011.
"A decade ago, set-top boxes (STBs) served as the bridge from analog to digital broadcasting. Today, MHGs are playing a similar role, acting as the bridge between broadcast and Internet Protocol (IP) video distribution," said Daniel Simmons, senior principal analyst at IHS and lead author of the report, "Multimedia Home Gateways: the Future of the Digital Home."
Demand will be driven by the fact that MHGs help pay TV service providers "utilize the efficiency of broadcast television to provide advanced services and content to all kinds of IP-connectable devices, including today's increasingly popular mobile devices," Simmons continued.
MHGs will supplant set-tops because they are basically more flexible when it comes to receiving and delivering IP content throughout a residence--and they offer multiple ways to do it, although Wi-Fi is the primary method, the researchers said.
"Beyond Wi-Fi, some of the major services include gigabit broadband, transcoding, large applications, graphics processors, content storage and edge caching," added Stephen Froehlich, principal analyst for IHS and a co-author of the report.
Importantly, he said, MHGs are good business for traditional set-top makers who are looking at dwindling demand for their legacy products.
"The hardware and software requirements for each MHG are quite different from one operator to the next, making MHGs a profitable point-of-value creation for STB manufacturers and their suppliers for the foreseeable future," Froehlich added.
And, for pay TV service providers, they offer an answer to over-the-top competition and a means of keeping subscribers glued to their services by not only moving video throughout the home but also facilitating other add-on services.
"Home automation and security, as well as smart energy and e-health services, all could be supported by the MHG and offer additional revenue opportunities," Simmons concluded.
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