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Consumer Set-Top Boxes Are Just a Temporary Fix

Getting content from the web to your TV is driving the release of several new set-top boxes such as the Roku, Apple TV (s aapl) and ZeeVee. And yet one of the top chipmakers in the set-top box market doesn’t see those types of appliances winning out over the set-top boxes you get from video service providers (cable, telco, satellite, etc.) anytime soon.

There are currently too many different set-top box options out there sold directly to consumers through the retail channel, plus the service providers are not going to stand by and let their portal into a consumer’s home slip through their grasp, argues Christos Lagomichos, EVP and GM of NXP’s Home Business divsion. NXP makes semiconductors for a variety of devices, including TVs and set-top boxes.

He expects the coming year to be tough for the retail box makers, and expects any success to be temporary or confined to a few tech-savvy early adopters. There are other limits as well. “The way I see the opportunity here today is you have a lot of free content on the Internet, and a box like that could be a great web box, but delivering HD content to the TV over a PC will be a nightmare — there’s no good transport mechanism,” Lagomichos says.

He’s talking about the limits of getting HD content to a PC using current broadband. In order to stream HD, two things are needed: speeds of at least 6-8 Mbps and a bandwidth provider that won’t cap your service. Service providers can guarantee quality of service through the box over their connections and they won’t count their own services against the cap. This worldview is kind of surprising coming from a firm that benefits from having as many potential customers in the market as possible, but nonetheless does seem practical, especially given how poorly similar consumer web boxes have fared.

8 Responses to “Consumer Set-Top Boxes Are Just a Temporary Fix”

  1. How does one define a set-top box? My Xbox and TiVo both provide HD movies using the Internet as a delivery mechanism with no problems. Regarding caps, cable/telco services must apply the same caps to the same transport mechanisms – if they don’t, they’ll be hauled into court for anti-competitive, network non-neutrality. Of course, most of them have their own dedicated, insulated pipelines into our homes – separate and distinct from the Internet access they provide. And also, you’d have to watch probably one HD movie a day to hit a reasonable cap like Comcast’s 250GB. A different story with some of the other caps, though… The NCTA tells me caps will increase as demand does and as applications proliferate.

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  4. I think it goes without saying that the cable and telcos have control over the TV settop box. (Digital cable is the focus here)

    The problem is it feels free to use the provided box. Plus, for TV, two tuners is basically required for DVR so you can watch and record–no settop box I’ve seen can do that with digital cable.

    What I want to know is why the TiVo deal with DirecTV isn’t a good model for these boxes? I think people would pay a premium for better functions (like the things the current boxes are working on). Plus, it would be good for consumers who may be inching closer to pushing for the cable companies to become ‘dumb pipes’.