IPTV market shows strength across all regions, says Lowe
Jun 26, 2007 1:00 PM
A confluence of advanced compression technology and high-speed DSL and hybrid fiber networks is helping to propel the IPTV market, says Ken Lowe, Sigma Designs VP for strategic marketing.
Sigma Designs says it has about 75-percent market share for the media processor chipsets used in IPTV set-top boxes.
That alone should give it a good overall perspective on where the IPTV market stands and is headed. But add to that the company’s involvement with telcos and middleware vendors in advancing its business, and Sigma Designs appears to have as good a handle as any on the state of IPTV worldwide.
IPTV Update spoke with the company’s VP for strategic marketing, Ken Lowe, to glean some perspective on where the IPTV market stands today and the challenges it’s facing moving forward.
IPTV Update: What does Sigma Designs forecast the worldwide and North American markets to be for IPTV set tops?
Ken Lowe: If you combine the type of response the telcos have had so far to the services they offer and the state of the industry and the relative merits of the offering itself, what we’ve seen is a pretty strong reception given that in the various markets there are alternatives that exist.
In the U.S. market, there certainly is a range of alternatives that exist, and I think AT&T coming out with one of the first offerings in IPTV using the Microsoft IPTV experience was a prudent decision because Microsoft IPTV represents the top end of the spectrum in terms of offerings.
So coming into a space where it’s dominated by premium services you can get from cable and satellite, you’ve got to offer one-upmanship and a reason for people to switch.
What we are seeing is the type of information we are being exposed to is a lot of receptivity and pent up demand, and as soon as the spigot is really turned on heavily and promotions are started in each of the regional areas, that’s really going to start lifting up quite nicely.
In Europe, there is a slight county-by-country difference, but overall the market is strong. There is very little existing cable service installed over there. Premium services for video have not been as prevalent, but Europe is starting to develop an appetite for high-definition TV, and with that appetite it is also bringing them into a situation where they know they are going to have to get premium services. The HDTV uptake in Europe is kind of precursor of what is happening there. We think that is going to spill over to demand for high-definition DVD players and other things as well, which will help the overall demand.
In Asia, we are seeing continued interest by nearly all the telcos. Amazingly, you look at the heavily industrialized nations — Japan and Korea — they certainly have a vast installed base of high-speed DSL. They’ve been prepared for a while to put anything across the Internet that they need to, and they are getting a reasonably strong penetration over there. But in places like China and India, the interest is there as well, even though the economics of the area is a challenge to meet with a set-top box that can be subsidized by carriers and still make money.
We just simply don’t see an area of the world that doesn’t have the interest and doesn’t see the merits. It’s amazing that this market is something that we’ve been trying to penetrate for six to seven years, and the early years of the market was a long precursor tail with latent demand, but now that it has started to happen, it seems that it is bursting at the seams.
IPTVU: One technology point that may have been an obstacle was adequate compression to deliver multiple HD and SD channels as part of a service offering. That seems to have been removed with the arrival of MPEG-4 H.264. Do you agree, and are there other technology obstacles impeding IPTV from reaching its full potential?
KL: There were two challenges over the past four years that presented an obstacle for deployment. One was that existing DSL speeds were barely enough to really allow a standard-definition type of experience, and the standard-definition television experience wasn’t considered to be something anyone would get excited about in North America or Europe.
Simply being able to buy an alternate service from a telephone company with standard-definition TV, nobody was really jumping to get into that. Video on demand kind of increased the ante, but still was something with a lot of uncertainty.
In the last couple of years, there’s been a confluence of two different technological evolutions. One is the advent of the new high-compression standards, MPEG-4/H.264 and VC-1 as a pairing. Since those two standards were anointed as the heir apparent to MPEG-2 by both HD-DVD and Blu-ray committees, everybody knew that the chipsets for those would go into high volumes. So you have commercially cost-effective support for those standards in standard decoder chips.
The other factor was high-speed DSL lines and hybrid fiber DSL networks that were going to enable a bump up in capability and bandwidth. The confluence of those factors really allowed the vision to extend beyond standard definition and beyond what can we do today.
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