Mobile integration key to set-top box market
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Mobile integration key to set-top box market

Smart set-top boxes such as the Apple TV often garner less attention than other connected CE [consumer electronic] devices like TVs and game consoles; Apple has referred to its Apple TV as a "hobby" although it leads the market with around 4 million units shipped through 2011.

Roku has had recent success (e.g. passing 2.5M units in 2011), but the future looks at the very least challenging for these dedicated streaming devices to break out of a niche status. TVs, game consoles, Blu-ray players, and even mobile devices are quickly conspiring to engender a very competitive market for the digital living room. Even so, set-top box shipments are expected to reach as high as 57 million by 2017.

"Google has a split personality in this market," says Sam Rosen, practice director of TV & video at ABI Research ( "On the one hand, China, in particular, is seeing growing interest in 'generic' Android based set-top boxes and USB (or MHL) dongles/stick devices. On the other hand, it is launching its second generation of Google TV platforms (including the well-priced and impressively spec’ed Vizio Co-Star) where it tries to bring more content relationships and a better ecosystem."

The smaller form factor USB and MHL devices are both portable and like the Android set-top boxes, offer consumers similar services and features found on popular mobile devices. Both of these devices expand the presence of Google Play but also could work well as a companion device for Android based mobile devices -- not unlike the upcoming Nexus Q, just at a more appealing price point.

"Dedicated devices have traditionally had a difficult go in the market, often lacking the same value proposition as more full featured products like game consoles," says ABI Senior Analyst Michael Inouye comments. "The changing consumer landscape, however, could present a window of opportunity for smart set-top boxes as more consumers allocate entertainment budget, both monetary and time, to streaming media."

The future of connected CE will ultimately work together with mobile devices and not against them. Other CE devices like connected TVs and game consoles are already integrating mobile devices into the user experience. The same will likely prove true for smart set-top boxes as well. If the Android boxes gain popularity this could create a stronger ecosystem play for Google.

-- Dennis Sellers

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