Motorola Next Level Communications, which at the USTA TELECOM ’03 this fall highlighted a high-end set-top box, is hurrying to bring lower-cost telco set-top boxes to market. At the same time, low-cost set-top box vendor Amino Communications Ltd. is apparently readying personal video recording (PVR) functionality in a move to get telco customers to trade in their stripped down, single-stream set-tops for higher-end devices starting next year.
Trent Punnett, vice president or marketing and product management with Motorola Next Level Communications, at TelcoTV this month told XCHANGE the company has “a number of strategies in play to radically drop the cost of our set-top boxes.” The company, he said, expects to introduce lower-cost set tops for the telco TV set in 2004.
“It’s on the fast track,” Floyd Wagoner, who’s in product marketing at the vendor, told XCHANGE.
Both Punnett and Wagoner stress that Motorola Next Level Communications is not abandoning the idea of full-feature set-top boxes.
However, set-top box vendor Thomson at TelcoTV introduced a lower cost set-top box, opting to phase out an earlier, more expensive set top.
As will be reported in the December 2003 issue of XCHANGE, Thomson is phasing out production of its higher-end telco set-top box, which sold in the upper $200 to lower $300 price range, in favor of a lower-cost box called the IP900. “The first box, the DSL 1500/Copperhead, was meant to be all things to all people,” Herman Haas, vice president of America sales for telco products at Thomson, told XCHANGE in October. “It was speced out at time when the market was young and people wanted to try all different things.”
Thomson’s IP900, which sells in the mid to upper $100 range, is less than a fourth the size of the DSL 1500/Copperhead. The new IP-based device is based on the same basic technology as the earlier product but has more integrated silicon and has been stripped of a lot of the interfaces that would have allowed the addition of a hard drive module or an ADSL modem, says Haas.
Working in the opposite direction is startup set-top box vendor Amino. Minerva Networks CEO Mauro Bonomi tells XCHANGE the Amino is planning to add PVR functionality to its set tops this year in a move to get telcos to trade up to at least slightly more expensive set top boxes. Amino and Minerva are both vendors to triple-play service provider SureWest Communications. Amino did not immediately respond to XCHANGE’s requests for comment.
Amino today sells wallet-sized, IP-based set-top boxes to such service providers as Cyprus Telecom, SureWest Broadband and, for trials, to Coastal Bend Telecom in Bend, Ore., and others. Silicon consolidation, which allows Amino to deliver a single-chip set-top box solution, means the company can offer its product at about half the price of a traditional cableco set-top box, says Karthik Ranjan, Amino’s director sales for North America. The boxes, which deliver a single stream of video, are priced in the hundreds today, he adds, but Amino believes it can get its set-tops to go below $100 in volume by the end of 2004.
“There are set tops that can be had in volume now at just over $200 U.S., and it used to be in the $340 to $380 range,” adds Derek Kuhn, director of marketing and business development at Alcatel, which doesn’t sell set-top boxes but is a leader in broadband access and transport equipment with the telcos. Companies like Equator Technologies Inc. and Zoran Corp. are creating silicon at dramatically lower costs, he says, allowing one chip – as opposed to a dozen – to offer complete set-top capability. DSP functionality is still separate, he adds, but may be integrated onto the single chips starting next year.
