The global set-top box market size was valued at USD 22.57 billion in 2021. It is expected to reach USD 29.2 billion by 2030, growing at a CAGR of 3.25% during the forecast period (2022–2030). The television business is experiencing a surge in growth due to technical advancements and the increasing global usage of smart home technology. Globally, vendors are innovating their products significantly to meet client demands and market requirements. A set-top box is a device that enables consumers to stream video content from select internet video providers via the internet. These boxes, sometimes called Set-Top Units, transform a digital television signal to analog so that it may be viewed on a standard television set or enable the viewing of cable or satellite television. A set-top box, often known as an STB, is a device having a tuner that receives a signal from an external source and transmits it to the television for a high-quality picture. A set-top box is required to continue receiving signals in the digital format.
The set-top box market is anticipated to increase due to rising internet and broadband penetration, growing preference for HD channels, and on-demand video services. Customers' attitudes toward consuming media content on the internet and television have changed dramatically due to changes in the digital TV industry. As disposable income rises and the middle-class population expands, consumer demand for media-rich home entertainment services increases. As a result, the market leaders now have more prospects due to the rising demand for next-generation Set-Top Boxes (STBs) that can support internet-based services, Video on Demand (VoD), and television broadcasts.
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Booming Technological Innovations
Artificial intelligence is increasingly being used in set-top boxes since it improves the picture quality of STB devices. SK Broadband declared the debut of AI Sound Max for 2021. This set-top box blends the most recent advancements in artificial intelligence with Bang & Olufsen's high-end audio technology. Additionally, AI technology enhances voice functions for sophisticated applications and contributes to a better user experience. New voice technologies have been made available to navigate the material. Sky Connect, a set-top box (STB) with Google Assistant far-field speech technology, was introduced in 2021 by Technicolor Connected Home and Sky Brazil. It enables subscribers in Brazil to navigate entertainment content on their TVs. The tool aids in selecting preferred television shows, video games, music, and other sources of information.
The set-top boxes' use of Wi-Fi 6 technology broadens their market appeal. ZTE announced the release of an Android set-top box that features Wi-Fi 6 technology in June 2021. Wi-Fi 6's addition enables more incredible speed with decreased interference and latency. Additionally, in terms of connectivity, the launch of 5G set-top boxes is fueling the market's expansion concurrently with the rapid advancements in 5G deployment around the globe. Businesses have released a set-top box with 5G connectivity like CommScope and ZTE. Modern set-top boxes exhibit the development of a new processor or CPU to guarantee fluid browsing and application operation. The Android set-top boxes provide many music, OTT, and gaming-related applications. These demanding programs require a processor to perform smoothly, increasing viewer attention. Thus, technological advances have aided the growth of the set-top box market to a considerable extent.
Increasing Production Cost
Over the past few years, the growth of the television market has been significantly constrained by the rise in production costs. Additionally, this causes the price of different television sets in many other parts of the world. Due to rising operating costs brought on by higher ocean freight and domestic transit costs, television prices increased in April 2021. Television panels are imported by businesses in an open-cell state and require additional assembly before being dispatched for sale. The primary cause of a price of threefold for open cells, according to Super Plastronics Pvt., is their lack of availability in the market. As a result, one of the critical reasons for the market's sluggish growth is the increase in TV production costs brought on by the rise in panel prices.
Growing Adoption in Emerging Nations
The emerging markets are Brazil, Russia, China, and India. The expansion of internet-based set-top boxes is influenced by the expanding internet and broadband penetration in emerging markets. In China, there were 854.49 million internet users in 2019 and 988.99 million in 2020, according to the China Internet Network Information Center (CNNIC). The mandated digitization of traditional cable networks by state agencies in emerging economies promotes industry expansion. The Cable Television Network (Regulation) Act, which includes DPOs that discuss the broadcast of programming using digital addressable systems, etc., is being amended according to a proposal published by the Indian Ministry of Information and Broadcasting (MIB) in 2021.
New market opportunities are being created by the rising demand for high-definition TVs in emerging nations. Sales volume grew in Japan, Brazil, Australia, Indonesia, and Russia. Emerging nations' adoption of 4K TVs creates a demand for set-top boxes that provide HD and ultra-HD resolution content. Vendors are actively enhancing the capabilities of STBs. A whole line of smart gadgets, including a voice-activated Alexa built-in smart kit and an internet-capable HD Set-Top Box based on Android, was introduced in October 2019 by Dish TV India Ltd. More prospects are generated as a result of these factors.
The global set-top box market is classified by technology, resolution, and region.
Technology-wise, the global set-top box market includes Satellite/DTH, IPTV, Cable, and Others.
The IPTV section is forecasted to hold the largest market share over the forecast period. The set-top box in IPTV networks is a compact computer that enables two-way communication and decodes streaming video. In most cases, IPTV technology is utilized lawfully. The boxes that access the signals were first created to let users broadcast legal video to their TVs through a broadband connection. The public is buying an increasing number of IPTV systems that let them watch live Premier League football and other sporting events without paying a membership fee.
The DTH/Satellite section will hold the second-largest market share. Receiving satellite television using direct-broadcast satellite signals is known as direct-to-home (DTH) television. The technology was created to compete with local cable TV distribution systems by delivering better satellite signals with more channels. DTH providers offer dish receivers so viewers can pick up the satellite signal. They send a signal to the receiver, then transmitted to a Set-Top Box receiver in the viewer's home.
Resolution-wise, the global set-top box market includes SD, HD, and Ultra-HD & Higher.
The HD section is forecasted to hold the largest market share over the forecast period. Full HD resolution indicates a width of 1920 pixels and a height of 1080 pixels. A high-definition set-top box can display both standard definition and high-definition channels, while a standard definition set-top box typically only has access to standard definition channels. Since 1080-pixel monitors have inundated the market over the past five years, HD has emerged as the new norm. Given the rising need for dependable content and the flexibility of connecting HD STBs to monitors and TVs, they are valuable for watching experiences.
The Ultra-HD & higher section will hold the second-largest market share. The resolution of a UHD set-top box is 3,840 by 2,160 pixels, which is twice as many vertical pixels as full HD. For television shows, movies, and sporting events, a higher pixel density produces images that are sharper, more defined, and allow for more detail and depth. Service providers have been aggressively working on expanding their customers' options to distribute UHD content. The demand for UHD STBs has also been driven by customer interest in 4K TVs.
Asia-Pacific Reigns Supreme Over Other Regions
Region-wise, the global set-top box market is analyzed across North America, Europe, Asia-Pacific, and the Rest of the World.
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Asia-Pacific will command the leading market position over the forecast period. Increased STB deployment has been the target of regional government initiatives. Due to high demand, particularly in rural regions, the Malaysian government declared its intention to distribute an additional 1 million MYTV digital TV decoder units for free in 2020. The government is attempting to increase broadband connectivity while ensuring that digital TV broadcast is unaffected.
The deputy communications and multimedia ministry are a part of that endeavor. MYTV does not require internet access to provide its digital TV service. It uses terrestrial DVB-T2 signals, gathered via a UHF antenna and connected to either a TV that is DVB-T2 compatible or a decoder box. The expansion of the Asia Pacific set-top box industry is being driven by favorable government policies requiring installing set-top boxes in Asian nations. The regional market is expanding partly because of the region's low production costs caused by plentiful labor and resources. Businesses like Technicolor and others are increasing their production capacity in Asia, particularly India.
Europe will hold the second-largest market share over the forecast period. The region's expanding use of AI by Pay TV broadly provides opportunities for STB vendors. It is more affordable than the cloud by making edge processing accessible in the STB. This is because the price of bandwidth doesn't decline as quickly as the price of computation and storage. Operators may provide a better user experience by enhancing audio capabilities like automated voice recognition due to significant latency improvements from employing the edge in STBs.
Additionally, the European Union created Ecodesign regulations (2009/125/EC) to govern the production and sale of essential set-top boxes that are energy efficient. The EU had already ordered Broadcom, a significant US-based manufacturer of semiconductors for TV set-top boxes, cable modems, smartphones, and communications gadgets, to stop exclusivity agreements because they were anti-competitive. But as the STB market developed over time, it now poses difficulties in the form of security worries and control over analytical data. Additionally, it allows technology to retain user-centric privacy, simplifying General Data Protection Regulation issues.