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available to FULL subscribers of: Television Intelligence TV Technology Intelligence format: Print & PDF published: 11-Apr-07 pages: 24 - tables & charts: 109 Author/s Robert Ambrose Vincent Létang Territories covered Western Europe Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK, Central and Eastern Europe Russian Federation, North America Canada, USA, Africa and Middle East Saudi Arabia, Turkey, Asia-Pacific Australia, China, Hong Kong, Japan, Korea. Rep [S], Companies covered ADB Amstrad Apple ARM Broadcom BSkyB Cisco Conextant Coship DirecTV Echostar Harmonic Humax LSI Matsushita Micronas Microsoft Motorola NEC NXP Pace Micro Technology Panasonic Philips Pioneer Pixelworks Sagem Samsung Scientific Atlanta Sky Italia Sony ST Microelectronics Tandberg Texas Instruments Thomson Toshiba Sigma Designs AMD Fujitsu MND Neotion Vivace Zoran ARC International Imagination Technologies Improv Systems MIPs Technologies Renesas Technology Silicon Image Tensilica Amino Communications CG Electronics Netgem Tatung Tilgin Wegener

This is the third Screen Digest report to focus on the roll-out of high-definition across the audiovisual industries, and focuses on the set-top box business and the market for HD video decoding chips. With the number of HD-ready households in the 17 top western European markets projected to reach 82m by 2010, Screen Digest forecasts a significant market for HD set-top boxes for satellite, cable, IPTV and terrestrial pay-TV platforms.

While early HD launches, particularly in the US, used MPEG-2 video compression, almost all new HD launches are now using the more efficient MPEG-4 Advanced Video Codec (AVC) encoding. This has created a significant new market for MPEG-4 decoding chipsets and MPEG-4 set-top boxes.

The report profiles all of the major players in the industry, including set-top box makers, AVC chipset suppliers and silicon intellectual property providers. It values the European market for AVC silicon and set-top boxes with forecasts to 2010, based on Screen Digest's HDTV models. The report also maps all current deployments of HD set-top boxes by TV operator/platform, set-top box provider, set-top box models and chipsets used.

Key findings:

• HD ready households in the top 17 European markets reaching 82m by 2010
• Of these, 17m will be 'HD watching' -- i.e. requiring an HDTV set-top box to receive hi-def content
• HD pay TV platforms had been launched in 11 European countries by the end of 2006, with many more expected in 2007
• While early HDTV launches in the US have used mostly MPEG-2 video compression, the vast majority of HD services in the rest of the world are using more efficient MPEG-4 encoding, specifically the Advanced Video Codec (AVC)
• After a slow start, AVC-decoding chipsets became readily available in the second half of 2006 from manufacturers including Broadcom, Conexant, Sigma Designs, STMicroelectronics and Texas Instruments
• AVC HD set-top boxes have been deployed by a number of manufacturers including ADB, Amstrad, EchoStar, Humax, LG, Netgem, Pace, Philips, Sagem, Scientific Atlanta and Thomson
• AVC chipsets are also needed in the much larger market for HD DVD players, Blu-ray Disc players and hi-def games consoles
• The AVC-chipset market is fast-developing: while many early chipset designs used an existing MPEG-2 chip with an AVC decoder added, single-chip designs are now emerging, with dual-decoding channels.
• Improved designs and manufacturing experience is increasing yields and reducing costs
• Support for home networking and secure transfer of HD content to portable devices is already being supported by chipset and set-top box makers, though has not been deployed by pay TV operators
• Screen Digest forecasts a European market for 8m AVC set-top boxes by 2010, worth nearly Euro 700m
• The European market for AVC chipsets, including those used in disc players and games consoles, is projected to be worth Euro 344m in 2010
.

Table of Contents

Executive summary

HDTV roll–out and forecasts
HD drivers
HD services take-up and forecasts
HD ready households
HD watching households
Availability of HD broadcast and HD content
HD across delivery platforms
HD influences
Display technology
China
Picture quality is an issue
High definition home video discs
Home networking
The European market for HD set–top boxes and HD semiconductors
Scenarios for migration to MPEG-4 AVC

High definition technology
Background
Why resolution matters
The importance of encoding
MPEG–2 HDTV
MPEG–4 AVC
VC–1 encoding
Set–top box overview
Falling single–channel decoder costs
Dual-channel designs
New system partitioning
Semiconductor manufacturing
Box design cycle
Other HD cost factors
Memory
HD challenges
Terrestrial HD broadcasting
AVC licensing
Media Centres and hybrid STBs
Copy protection
Microsoft DRM
Secure Video Processor
TrustZone
HD-ready displays
EICTA's 'HD ready' minimum requirements for TV sets

MPEG–4 decoder silicon manufacturers
AMD
Broadcom
Conexant Systems
Fujitsu
LSI Logic
Micronas (WISchip International)
MND
NEC Electronics
Neotion
NXP Semiconductor
Pixelworks
Sigma Designs
STMicroelectronics
Texas Instruments
Vivace Semiconductor
Zoran

MPEG–4 silicon intellectual property providers
ARM
ARC International
Imagination Technologies
Improv Systems
Matsushita (Elixent)
MIPS Technologies
Renesas Technology
Silicon Image (Sci–worx)
Tensilica

HDTV Set–top box providers
Advanced Digital Broadcast
Amino Communications
Amstrad
Apple
Cisco (includes Scientific Atlanta)
Coship Electronics
Echostar
Humax
LG Electronics
Matsushita (Panasonic)
Motorola
Netgem
Pace Micro Technology
Philips Consumer Electronics
Pioneer
Sagem Communication
Samsung
Sony
Tatung
Thomson
Tilgin
Toshiba
Wegener

Glossary

Tables and Charts

HDTV roll–out and forecasts
World top 22 markets: HD ready households
World top 22 markets: HD ready households share of all TV households
HD Ready Households
HD Watching Households
Europe: TV Households, HD ready and HD watching
World top 22 markets: total HDTV-watching households (free and pay)
World top 22 markets: HD watching households share of all TV households
World HD platforms launched 2003-2007
HD launches by country and delivery platform
Factors creating demand for HD–decoding AVC silicon
The Market Model used by Screen Digest
Europe (top 17 markets): Market volume for AVC MPEG–4 STBs and devices
Europe (top 17 markets): Market volume for AVC decoding chipsets
Europe (top 17 markets): Market volume for AVC MPEG–4 STBs and devices

High definition technology
SD & HD broadcasts: typical resolutions and bit rates
Average price per MPEG–4–HD channel at year–end (dual–channel chipset)
Average price per MPEG–4–HD channel at year–end (single–channel chipset)
The set–top box cycle, from chip design to operator roll–out
The Secure Video Processor eco–system
HD platforms deployed by set–top box/AVC decoder

MPEG–4 decoder silicon manufacturers
MPEG–4 chipsets: product range and production
Overview of chipset manufacturers
Shipments of AVC chipsets to Europe: leading manufacturers

HDTV Set–top box providers
Price decline of MPEG–2 and MPEG–4 set–top boxes