"We expect unit shipments of set-top boxes to improve in 2015, but price competition for higher-end devices and growth among less expensive boxes for emerging markets will bring revenue down for the year," wrote Jeff Heynen, research director for broadband access and pay TV at IHS.
IHS expects particularly strong unit growth for HDMI dongles, which allow viewers to stream online movies, music, games, photos and apps to a TV using a smartphone, tablet or laptop. HDMI dongles, such as Google's Chromecast, Roku HDMI sticks, Amazon's Fire TV Stick HDTV, and virtual set-top boxes, are expected to see the highest unit growth of all the digital media adapters tracked by IHS, and could siphon away business from over-the-top (OTT) servers.
Other findings indicate:
- The global set-top box market - including IP/cable/satellite/DTT set-tops, OTT media servers, and HDMI dongles - totaled $4.2 billion in 1Q15, slipping 3% from 4Q14.
- IHS expects the number of HDMI dongles sold worldwide to top 27 million by 2019.
- Cable set-top sales fell 2% worldwide in 1Q15, to $1.5 billion, as declines in traditional digital boxes, media players and client devices offset gains in headed gateways and hybrid IP/QAM devices.
- A slowdown of sales in North America was to blame for global satellite set-top box revenue being down 3% in 1Q15 from the prior quarter.
- ARRIS (NASDAQ:ARRS) was the worldwide set-top revenue market share leader in 1Q15, and is far and away North America's leading set-top supplier to cable operators.