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Strategy Analytics: Digital TV Set-Top Box Sales to Reach Record Highs in 2004 (16/12/2003)

Manufacturers Will Sell 50 Million Units As Market Recovery Continues

Sales of digital TV set-top boxes will soar by 39 percent to a record 50.3 million units in 2004, according to the latest research from the Strategy Analytics Broadband Device Strategies service. This follows the recovery in demand seen during 2003, when sales will reach 36 million units, an increase of 28 percent. To achieve success in 2004, manufacturers must target key growth areas such as satellite in Europe and cable in Asia-Pacific, say the analysts.

Strong demand for digital satellite systems in the US and Europe, as well as the revival of the digital terrestrial market in Europe, were responsible for the recovery in set-top box sales during 2003. Prices continue to fall at around 12 percent a year, with the average set-top box now costing just over $200 at retail level. Increasing demand for higher value Digital Video Recorders and HDTV will help counteract the trend towards cheaper, entry-level devices.

"Manufacturers must develop clear strategies to deal with increased market fragmentation," says Peter King, Service Director at Strategy Analytics. "Some will benefit from concentrating on the low end "zapper" segment, but others should tap into the growing market for Digital Video Recorders and HDTV."

Satellite boxes currently dominate the market, with 61 percent of sales. By 2008, however, cable is expected to become the leading digital platform, with a 47 percent share, followed by satellite with 37 percent and terrestrial with 10 percent.

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