STBs to propel residential gateways market to triple by 2015: IHS

MUMBAI: Residential gateways, the home networking device used as a gateway to connect devices in the home to the Internet or other WAN, are expected to become the new hub of the so-called digital living room when they take over from set-top boxes, with the vigorous gateway market projected to triple from 2012 to 2015, according to a report from information and analytics provider IHS.

Although gateway devices will center on the North American region during the next few years and limit the size of the overall residential gateway space in the near term, the market will continue to expand as emerging regions begin to adopt the model.

If the current set-top box market is any indication, countries like India, Brazil, Russia and China could propel the gateway space during the latter part of the decade and beyond, IHS predicts.

In North America, many of the leading operators are moving to the server/client model, with the “Whole Home DVR” service offered by DirecTV, Comcast and others as the first step.

Shipments of residential gateways and thin client boxes that act as receivers are miniscule at present, but their numbers will grow dramatically as cable and wireless operators begin to roll out services offering broader connectivity and seamless access, the report notes.

According to IHS, the worldwide gateway and thin client shipments are projected to reach 4.2 million units in 2012, up from just 345,000 last year and a mere 1,000 in 2010.

Shipments then are expected to continue to climb quickly during the next two years—rising to 6.7 million units in 2013, to 10.4 million in 2014 and to 12.6 million by 2015.

“While the set-top box has been the heart of the home media environment, acting as the home’s primary media interface to the outside world and also connecting to the network and the TV, the residential gateway will be the next step up as it is able to link together an even wider range of devices,” said Jordan Selburn, senior principal analyst for consumer platforms at IHS.

“Through the residential gateway, a set-top box acting as a central server can be connected to any number of thin client boxes—and eventually to other media devices being used in the home, like smartphones or tablets—in order to deliver content. As such, gateways can become the nucleus of the digital living room, where consumers have seamless access to material from a wide range of sources.”

The residential gateway model also has a pull and push component driving it forward, further ensuring that the market will grow rapidly. Among service providers, gateways can save money by allowing them to move to a server/client configuration that is less expensive than putting a hard drive into each set-top box.

Operators also can charge for the increased connectivity provided by gateways, boosting provider revenues in the process. On the part of consumers, gateways with real-time, high-definition video transcoding capabilities will become a must-have feature in the connected world, allowing media to be correctly rendered in the tablets and smartphones that users already possess.

The key component within the residential gateway box—the media processor—is now ready for prime time, IHS believes. Tasked with converting media into the right format and resolution for a given rendering device, the media processor requires substantial computation power, and until recently was out of reach for even leading-edge media processors without a separate co-processing chip.

All that has changed, however, with companies like Intel Corp., Broadcom Corp. and STMicroelectronics launching products aimed at the gateway and client markets. Intel was the first to release a chip—the CE4200—for handling real-time transcoding, and quickly began to forge relationships with major set-top box manufacturers. For its part, Broadcom has the BCM7425 and other similar chips in volume production, while STMicroelectronics has its “Orly” chip scheduled for production in mid-2012.

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