IHS: Cisco NDS buy shows focus of pay-TV providers turning to multiscreen

Multiscreen devices active on pay-TV networks are set to explode by a factor of more than 10, with devices totaling some 303.7 million units by 2015, up from 29.5 million in 2010.

IHS Screen Digest said Cisco's (Nasdaq: CSCO) recent purchase of NDS for $5 billion gives further support to the notion that the industry is shifting away from hardware set-top boxes toward a software-based system that can better support the deployment of constantly evolving multiscreen devices.

IHS said that the overall STB market has been relatively flat, showing just a 9 percent compound annual rate between 2010 and 2015, compared to a 59 percent CAGR of active multiscreen devices.

Multiscreen devices include smartphones, media tablets, portable media devices, video game consoles, personal computers and Internet-enabled televisions (IETVs).

"While STBs will continue to represent a large market for U.S. cable companies, over the long term, multiscreen device access increasingly will become the core metric that determines the scale of operators' coverage," said Tom Morrod, senior principal analyst of TV technology for IHS. "To cash in on this trend, operators need digital rights management technology and a compelling user interface that can be ported across multiple devices. The U.S. cable equipment market has been rife with news and rumors of corporate acquisitions and sales--all of which point to a shift in emphasis away from STB hardware and toward multiscreen software and services."

Cisco's acquisition of NDS came among rumors that the company was shopping its STB and cable TV infrastructure division, assets purchased from Scientific Atlanta in 2005. IHS suggests that Cisco now appears to be massaging the details of this strategy to focus on software and services rather than hardware.

Google (Nasdaq: GOOG), too, has been rumored to be attempting to sell, or spin off, its Motorola Mobility (NYSE: MMI) STB business.

IHS points to Google's initial SEC filings for the Motorola Mobility purchase, which specified its intent to buy patent assets rather than Motorola's professional hardware and software businesses, as support of the intent.

For more:
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Related articles:
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Report: Google wants to dump Moto's STB business
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