Cisco won significant standard definition (SD) set-top box (STB) business in India in the quarter ending January 26, 2013. Cisco shipped 1.3 million boxes in the fourth quarter compared with 850,000 in the previous quarter, with a large portion of the increase coming from India, according to research firm ABI Research. Cisco CEO John Chambers remarked that the company has "been more selective in the business we are taking in terms of STBs and the lowest margin STB business in particular."
"Cisco has been able to retain attractive margins delivering set-top boxes in India because the engagements are based on end-to-end services. These engagements include Cisco headend equipment (notably, cable modem terminations or CMTS), middleware, and conditional access systems in addition to the set-top boxes," commented Sam Rosen, practice director at ABI Research.
China-based STB manufacturers ChangHong and Jiuzhou surged in unit shipments in the third quarter of 2012, and together grew 66% sequentially to nearly five million units from three million in the prior quarter. The tracked market grew approximately 10% worldwide. ChangHong serves primarily the Asian markets, while Jiuzhou has more of a mix of domestic and international business, added ABI.
"Asian market strength within the STB segment is no surprise," said Rosen. "Markets in North America and Western Europe are largely flat as markets in Asia grow and as African markets are expected to open up in the next few years. Western manufacturers are using end-to-end strategies, as shown by Cisco, while Asia-based manufacturers are operating at lower margins and aiming to compete on price within low-ARPU Asia-based markets."
Article translated by Alex Wolfgram
