October 30, 2013 -- Qualcomm, a titanic force in semiconductors for mobile devices like smartphones and tablets, is muscling its way into the global chip market for set-top boxes (STB), hoping not only to expand its coffers but also to shake up the tightly held STB space, according to insights from the Consumer Electronics service of IHS.
San Diego, Calif.-based Qualcomm is a serious contender to the current STB duopoly held by Broadcom, also from Southern California, and French-Italian maker STMicroelectronics. Both Broadcom and STM sit atop the $2 billion market for set-top box processors.
For several years now, the lucrative market for STB audio-visual processors has been dominated by Broadcom and STM. While a handful of vendors also competed, mostly with chips targeted at lower-performance systems, the two powerhouse suppliers virtually owned the high-end market and accounted for roughly 80 percent of total STB processor revenue.
Intel first began to mount a challenge to the duopoly a couple of years ago. The chipmaker has secured some high-volume, high-visibility design wins, but to date it still remains outside the Top 5 among suppliers. Now Qualcomm has entered the STB market, and the incumbent leaders will face another serious challenger, IHS believes.
Qualcomm is entering the STB space via the Snapdragon 600 MPQ8064, a chip featuring the companys quad-core version of an ARM-based architecture called Krait. The chip can process High-Efficiency Video Coding (HEVC) of a 1080p high-definition signal in order to achieve faster download of HD images to a set-top box for viewing, without image quality being sacrificed too much after compression, it is claimed.
In September Qualcomm announced it was partnering with Technicolor, a top-tier STB manufacturer based in France with a U.S. subsidiary in Boston, to power the Svelte box, unique in its LTE broadband interface. The Snapdragon 600 will be inside the Svelte box, which will feature 4G Long Term Evolution, the first time the next-generation broadband connectivity standard will be available on a set-top box for the market.
Qualcomm already owns more than one-half of the market for mobile equipment baseband integrated circuits, its chips used in prominent devices like the Apple iPhone and iPad. A very large multibillion-dollar companyits revenue grew from $2.4 billion in 2003 to more than $13 billion in 2012 Qualcomm has been looking for new opportunities in which to expand, and the STB processor market fits the bill. The market for STB chips is sizable, and it is a space in which Qualcomm already has a great deal of expertise in the key required functions.
More importantly, the sub-segments being targeted by Qualcomm, including home multimedia gateways, thin clients and residential gateways, are nearly greenfield opportunities where the well-established incumbents may have less of an advantage. Given Qualcomms scale and expertise, the company must be regarded as a legitimate contender for new design wins in these areasa threat that Broadcom and STM, as well Intel and other top players, will do well to heed, IHS contends.
Qualcomm sees the move from the mobile space, where the company holds a dominant position, to the home as a natural transition. It views the set-top box as not being too different from the handset because once the signal to be decoded is past the air interface in a handset or the front end in a set-top box, the tasks required of the processor are quite similarnamely, to decode video and audio, as well as to run apps. The latter, while common in handsets, should increasingly become a core function of STBs in the future.
Of the markets current Top 2 players, Broadcom has currently established itself as the player to beat for speedy performance. The companys chips were pervasive in demonstrations for ultra-high-definition TV decoding at the IBC Conference in Amsterdam held recently in September.
Industry revenue for advanced chips will begin to ramp up significantly in 2015 and beyond, but the battle for the market has already begun.
Read more >> IHS Home & Consumer Electronics service
IHS iSuppli's market intelligence helps technology companies achieve market leadership. Catch the latest semiconductor news, semiconductor forecast, semiconductor market, semiconductor electronic market from all across the world straight from our immensely experienced analysts. iSuppli provides comprehensive Home & Consumer Electronics portal at IHS iSuppli® offers the latest broadband industry trends, with in-depth broadband research analysis. that is rigorous, reliable & relevant. To know more, send us an e-mail on email@example.com or contact us on +1.310.524.4007.