The makers of pay TV set-top boxes need to consider stepping up their own consolidation movement, with the top four pay-TV services in North America all trying to merge.
That's the conclusion of a research note just released by ABI Research. The firm asserts that the world's top set-top box (STB) vendors-- Arris, Cisco, EchoStar, Pace Micro Technology and Technicolor--need to combine forces in a mature and fragmented market to keep pace.
This is especially true as pay-TV service providers merge into companies that service their subscribers over multiple networks, including cable, IPTV, satellite and over-the-top technologies.
"This mature, yet fragmented market, in which the top five vendors account for about 37% of revenues, is ripe for further consolidation," said Sam Rosen, practice director of ABI Research. "We continue to believe that integration of historically separate cable and IPTV providers with satellite set-top OEMs would bear fruit in the increasingly hybrid set-top box world generated with acquisitions."
The research firm predicts that the STB market is almost fully mature--it will top out at 265 million units in 2015, the brief says.
Arris, which recently acquired Motorola Home, is the STB market's biggest player, ABI says, with $2.1 billion in set-top box revenue for 2014, driven by sales of 18.5 million cable and IPTV devices.
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