By 2012, demand for digital set top box products is expected to rebound, driven primarily by increasing demand for digital terrestrial set top boxes, according to new In-Stat research, The Global Set Top Box Market: Decreasing Demand in 2011, Followed by Growth in 2012.

“Digital set top boxes continue to be key pieces of equipment for pay-TV service providers. For a growing number of service providers, the digital set top box serves as their gateway into the home,” says In-Stat digital entertainment research director Mike Paxton.

“In addition to their key position in the digital TV/pay-TV ecosystem, digital set top boxes also provide an attractive market opportunity for a long list of component vendors, to include semiconductor manufacturers and hard disk drive suppliers.”

New research by In-Stat reveals the following:

Worldwide digital set-top box unit shipments in 2010 decreased to 195 million.

Satellite set-top boxes remain the largest set-top box segment. Last year, 49% of all digital set-top box unit shipments were satellite set-top boxes. Cable set-top boxes are the second largest segment, providing 24% of all unit shipments in 2010.

Set-top box products continue to be an important revenue generator for a growing number of consumer electronics vendors. For example, in 2010, worldwide digital set-top box revenues were greater than the combined revenues of video game consoles and Blu-ray players.

Europeis expected to account for over 50% of worldwide unit shipments of DTT STBs in 2011.

In 2010, revenue from semiconductor components in digital set-top boxes reached $4.8 billion.

In-Stat also notes that the global set-top box market is grappling with some long-term challenges, such as the development of so-called “virtual” set-top boxes which have the potential to make many of today’s digital set-top box products obsolete. Virtual set-top boxes are defined as consumer electronics products, software platforms, or even network infrastructure that can provide conditional access (CA) and interactive TV functionality traditionally found inside a digital set-top box. However, In-Stat does not expect these products to have a significant impact on the set-top box market for another three to five years.

The research, The Global Set Top Box Market: Decreasing Demand in 2011, Followed by Growth in 2012, provides a comprehensive examination of the global digital set-top box market. It highlights the key position of the set-top box in the digital entertainment ecosystem, discusses market trends impacting product development and examines the growth potential of the four major digital set-top box market segments: cable, terrestrial, satellite/DTH, and IP. It also provides an aggregated worldwide digital set-top box revenue and unit shipment forecast through 2015.

For a free sample of the report and more information contact Elaine Potter, [email protected].

To purchase it online, visit: http://www.instat.com/catalog/mmcatalogue.asp?id=162