Cisco Stays On Top of the Set-Top Heap in Q1

Strength in Emerging Markets Helped Cisco Maintain Lead Over Pace and Arris in Q1 7/08/2013 9:55 AM Eastern

Cisco Systems retained and expanded its lead over set-top rivals in the first quarter of 2013, driven in part by high volume action taking place in emerging digital TV markets such as India and China, Infonetics Research revealed in a new report.

Cisco represented 16% of global set-top revenues in the first quarter, a healthy bump up from the 12.5% it raked in during the fourth quarter of 2012, said Jeff Heynen, the principal analyst for broadband access and pay TV at Infonetics.

U.K.-based company Pace was second, with 10% of the revenue share in the first quarter, followed by Motorola/Arris (9%) and Echostar (8%).  Others set-top vendors tracked by Infonetics in the period included  ADB Global, Changhong, Huawei, Humax, Jiuzhou, Kingvon, Netgem, Sagemcom, Samsung, Skyworth Digital, Technicolor, and ZTE, among others.

Heynen said Cisco came on strong due in part to solid sales in India, China and southeast Asia as cable operators there undergo major digitalization projects that emphasize high volume orders of basic, standard-definition set-tops.

He said a portion of that success can be attributed to Cisco’s $5 billion acquisition of NDS, which already had a strong satellite TV middleware presence in India, as well as Cisco’s  $44.5 million purchase of the set-top business of China’s DVN Holdings in 2009.

That M&A combo “is paying dividends for Cisco,” he said.

Cisco, Heynen added, is also getting some lift from its IPTV set-top box business thanks to major contracts scored with AT&T, Deutsche Telecom and Telus.

The global set-top box market totaled $4.4 billion in the first quarter, a 5% decline from the fourth quarter of 2012, according to Infonetics. About 56% of all set-tops shipped in the period were standard-definition boxes, a figure driven by the aforementioned digitization projects in emerging markets.

Only cable set-tops and over-the-top media servers gained on a sequential basis in the first quarter.