Digital TV star

Digital TV star
STMicroelectronics is preparing to make 14 million set-top box chipsets this year; Demand up after announcement of free digital TV boxes; ST ready for increase. Alex Mayhew-Smith STMicroelectronics (ST) will be the main silicon vendor beneficiary of the expected boost in digital TV following the announcement of free set-top boxes. The exclusive supplier to BSkyB is set to make 14 million set-top box chipsets this year – over two thirds of the total world market for set-top boxes. “Last year about 12 million set-top boxes were sold and ST had over two thirds of the market. We expect to maintain that,” said Matthew Hatch, ST’s marketing director of its digital video division. The company is also ready to ramp up production of chipsets supplied to the manufacturers which provide BSkyB its set-tops. “We have been working closely with BSkyB for three years,” said Hatch. “Increased demand will not come as a surprise…We have monthly meetings with BSkyB.” Although ST did not know about BSkyB’s plan to give away free set-top boxes before it was announced, the company had been expecting digital TV operators to pursue aggressive marketing strategies that would increase consumer demand. The US market, which leads the way in terms of digital TV, did not become a success until strong pricing competition brought prices down. US consumers – who according to Hatch went crazy when prices for digital TV came down – have stayed faithful with set-top boxes as opposed to integrated TV sets. BSkyB recently said it had amassed 551,000 subscribers to its digital TV service by the beginning of May, racing away from rivals ONdigital. Almost half – 212,000 – are new customers and the rest are made up of existing analogue subscribers switching over to digital. Rivals ONdigital recently reported subscriber figures of 110,000. If it comes to a pricing war, BSkyB is expected to come out on top, according to analysts, due to the backing of Rupert Murdoch’s News International group.


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