ISDB-T receivers

	Shenzhen Advanced Video Info-Tech Co. Ltd offers the MPEG-2-compliant C-0283 DVB-C receiver that supports NVoD. The unit adopts an ST-5105 chipset and features Irdeto and Conax embedded CAS.

The ongoing global transition to digital TV broadcasting has placed the digital set-top box (STB) industry on the fast track, assuring a stable growth path in the next five years. China accounted for an estimated 60 percent of the global digital STB output, which according to Strategy Analytics exceeded 100 million units in 2007. Nearly 70 percent of China-made STBs were exported, primarily to Southeast Asia, the Middle East, Europe and Australia for DVB STBs, and the US for ATSC STBs.

DVB receivers form the bulk of China’s overseas shipments. The traditional destinations for DVB-T and DVB-S receivers are Europe and Australia, and increasingly, emerging and fast-growing markets such as Southeast Asia, specifically Vietnam and Malaysia, as well as India and the Middle East. The mainland’s DVB-C receivers, on the other hand, are mostly shipped to Taiwan and South America. DVB-H products are also produced and exported.

Price advantage is China suppliers’ edge over their global competitors. Within the domestic industry, however, rivalry presents a challenge as the industry continues to attract players from other fields, including large companies from the home appliance and other electronics sectors. To stay ahead of the local competition and remain globally viable, some China makers continue to build their technology base.

Intellectual property rights issues also present a continuing challenge for most China suppliers, especially as fees cut into their price package. This impacts production as specific fees apply depending on the standard adopted by their target regions. With the exception of Europe due to its mature DVB market, makers face an additional challenge in the need to cooperate with buyers in other regions to meet respective local requirements such as conditional access (CA) and video on demand (VoD). For small companies, this is an R&D challenge.

To address this problem, small and midsize companies do not include the IPR fee in their FOB quotes and let their OEM clients pay for it. Large suppliers, which cater to markets partial to performance-to-price ratio, secure the license on buyers’ requirement.

However, under the current global economic situation, China’s STB market is in for a slight adjustment, especially exports. If export ratio has been between 70 and 80 percent of output for most China suppliers, this is expected to decline to about 50 percent for many companies. Aside from the effects of the appreciating yuan and IPR fees on exports, there is a marked reduction in demand from certain markets such as Western Europe, specifically Germany, Spain and Italy.

In contrast, there is an increased requirement in China’s domestic market, thanks to government efforts to push the digital TV industry through the 2008 Beijing Olympics. The region’s digital switch is set for completion by 2010, with implementation now in effect inpilot areas such as Shanghai, Guangzhou and Shenzhen. These cities have adopted China’s own digital terrestrial standard, DMB-TH, or DVB-T. As a result, many STB makers in China, especially tier-one companies, are increasing their stake in this captive market rather than on the currently volatile export scene.
Basic DVB receivers dominate SD output
DVB-T, DVB-S are high-end HD DVB receivers
China dominates global production; Southeast coast harbors major hubs
Mass production brings down prices
Makers adopt various digital standards
Makers target digital, IP-based lines

Basic DVB receivers dominate the standard definition (SD) output of China suppliers, while models with enhanced functionality take only 10 to 15 percent share of many suppliers’ total output.

Basic models, usually positioned in the entry level, are DVB-compliant, adopt MPEG-2 decoding and support conditional access systems (CAS). Other features include 4:3 and 16:9 aspect ratios, multilanguage OSD, 1,000-channel memory, parental lock function, EPG, subtitle and teletext features, and auto and manual NTSC and PAL conversion. Software update is through an RS-232 port. Other connectors are CVBS, SPDIF and YPbPr RCA. These units have built-in antennas and come with full-function infrared remote controls.

Enhanced DVB receivers take the midrange slot, offering functions similar to home media centers. These feature time-shift TV services such as near video on demand (NVoD) or true VoD, digital video recording (DVR) function and optional internal or external HDDs via USB. These also have settings to meet regional requirements. Other features include VFD/LED displays; 4,000-channel memory or more; and picture-in-picture, over-the-air and game functions. Program management functions are favorite-channel list setting, move, rename and delete. These units also have USB and memory card slots.
In addition, new-generation enhanced DVB receivers boast IP connectivity through Ethernet ports that support 100Mbps networks, and UDP and TCP/IP. Some models have built-in HTML browsers.

For solutions, China suppliers turn to ST, NEC, Zoran, CheerTek and ALi for their DVB-T receivers. For DVB-S receivers, they adopt solutions from ST, NEC, Fujitsu, Conexant, ALi, Haier (China) and Hangzhou NationalChip Science & Technology Co. Ltd. DVB-C solutions are purchased mainly from ST, NEC, Fujitsu, Conexant and HiSilicon Technologies Co. Ltd (Shenzhen). Most exported products embed CAS from Irdeto, Conax or CTI.

	The DTT6720 from Sichuan Jiuzhou is an MPEG-2/MPEG-4/H.264-compliant DVB-T HDTV receiver that supports multiple display modes—1080i, 720p, 576p and 576i.

Comprising China’s high-end offering in the DVB line are DVB-T and DVB-S (S2) high-definition (HD) receivers. These products are compatible with 1080i, 720p, 576p, 576i and 480 video formats. These support MPEG-2, MPEG-4 AVC, H.264 and VC-1 video decoding, and Dolby AC-3, MP3 and MPEG-4 AAC audio decoding. Compatible A/V formats include MPEG-1, MPEG-2, MPEG-4, MOV, AVI, ASF, WMV, MPG, VOB, MKV, AVC (HD), WMA, AAC and LPCM. For connection besides analog and digital A/V outputs, most HD DVB receivers have HDMI.

HD DVB-S2 receivers from China suppliers adopt solutions mainly from ST, as well as from Broadcom, Conexant and ALi. Models with ST solutions are priced higher by 10 to 30 percent than the rest.

China’s HD DVB-T receivers have solutions from Sigma Design, ST, Zoran and AMD/ATI. The typical specifications are 128MB or 256MB DDR SDRAM, 16MB or above NOR flash. Some models have internal HDDs.

Makers expect that China’s HD DVB production will increase in 2009, as the HD trend gathers more speed leading to lowering prices. Shenzhen Skyworth Digital Technology Co. Ltd, for instance, exported 5 percent of its HD DVB receivers in 2008, up from 2 percent in 2007.

	Shenzhen Skyworth's S17 DVB receiver comes with a built-in ALI M3329E single-chip processor and is MPEG-2- and DVB-S-compliant. It supports 400 TV and radio channels.

The southeast coastal provinces of Guangdong, Fujian and Zhejiang and city of Shanghai are the primary manufacturing centers of DVB receivers in China, being established sites offering skilled human resource and fast-growing market bases.

Of the region’s 300 STB manufacturers, about 40 percent are operating in Guangdong, specifically in Shenzhen, which has a mature supply chain. Among the tier-one companies in Shenzhen are Shenzhen Coship and Shenzhen Skyworth.

However with Guangdong’s declining cost advantage in labor, raw materials, land and energy, other areas in China, especially inland provinces and cities, are now alternative production sites. These include Sichuan and Chongqing, where many DVB makers such as Sichuan Jiuzhou, Sichuan Changhong Electric Co. Ltd and Sichuan KingVon Electronic Technology Co. Ltd have set up operations.

Being China’s key cities has also made Beijing and Shanghai important production centers. Many chipset and solution suppliers are based here, including many foreign companies such Thomson and Motorola, attracting many DVB manufacturers.

For its proximity to Shanghai, Zhejiang has drawn some DVB chipset and DVB end-product manufacturers. Among its denizens are DVB chipset suppliers Hangzhou NationalChip and Hangzhou Image Silicon Tech Co. Ltd. Zhejiang Dahua Technology Co. Ltd produces DVB products. The latter two companies are now owned by Motorola.

Shandong, which is closer to Beijing, has some major home appliance players such Hisense and Haier that are also producing DVB chipsets and DVB end products.

As the STB industry continues to evolve with the entry of large companies from other sectors, it is still an open field and has yet to have established major players. Among the major TV and home appliance manufacturers that have deployed their STB lines are Shenzhen Skyworth, Sichuan Changhong, Haier, Hisense, TCL and Konka. Shenzhen Skyworth, a subsidiary of Skyworth Group, has a factory in Shenzhen with an annual production capacity of 5 million DVB receivers. The company earmarks 50 percent of the output for export. From the PC and telecom industries, the STB entrants include Huawei Technologies Co. Ltd, Zhejiang Dahua and Tsinghua Tongfang Co. Ltd.

Based on manufacturing capability, small-scale operations generate less than 1 million units annually. Their offering consists mainly of basic products that are primarily designed for Europe’s mature consumer market. Midsize companies output between 1 million and 5 million units yearly. Comprising this group are specialists with in-house R&D and manufacturing capability for DVB-S, DVB-C and DVB-T products. They customize some products to suit buyer requirements, usually with the help of third-party design houses. Large-scale suppliers usually have an annual production of more than 5 million units. These include companies with more than 10 years’ manufacturing experience on a mass production scale and R&D capability to meet overseas volume orders.

Unlike solutions, China DVB makers mainly use tuners from local suppliers, especially for SD models. These components suppliers include large companies such as Sichuan Changhong, and midsize companies such as Shanghai Tower Electronics Technology Co. Ltd and Hiper Technology Co. Ltd. Products with imported tuners from Samsung, Philips, Thomson and Sharp are also provided on buyers’ request, and command a higher price.

Prices of DVB receivers are generally on the decline as mass production picks up. On average, prices across DVB product segments have gone down by 20 percent in the last 12 months. For instance, the average quote for an SD DVB-T receiver was about $20 in 2007 and was $15 in Q4 2008, while that of an HD DVB-S receiver was at $80 from $100. A further price reduction of about 10 percent is expected in H1 2009, as components suppliers increase in number and bring about lowering costs due to competition. Further, this can fast-track the transition to HD as the cost barrier starts to drop.

Hong Kong has about 20 suppliers of DVB and IP receivers, a mixture of long-time suppliers with more than 10 years’ experience manufacturing STBs, and some newcomers lured by the digital TV boom. The current supplier base has actually contracted slightly from a year ago, after some suppliers who attempted to develop their own models eventually pulled out due to technical or cost considerations. All manufacturing activities and a big part of R&D are carried out in mainland China.

Though market uptake for DVB and IP receivers is rising, some makers are somehow disappointed by the slow-paced growth. Shipment volumes remain below most initial projections. This has compelled some suppliers to prioritize models for the local market. Almost 50 percent of the suppliers have decided to shift focus on the local standard, DMB-TH, in the meantime.

Some suppliers develop new models whenever significant IC solutions are released. They watch out for the latest SoCs on which the integration of previously discrete components enables suppliers to save on material costs and development time. The latest SoCs are also leading to receivers with smaller footprint and lower power consumption.

DVB-T, DVB-S/S2, DVB-C, DMB-TH, NTSC and multituner receivers are available from different suppliers. Some portable, pocket receivers are also available with SCART or USB plug, as well as a few IPTV STBs. Existing sales channels have an influence over suppliers’ development directions, which is why some suppliers develop ATSC models only, and others develop mostly DVB-T or DVB-S products.

The latest releases are mostly HD models. Most models support output of 1080i, 720p, 480p and 480i, 576p, 576i and, increasingly, 1080p. Codecs supported include MPEG-1, MPEG-2, MPEG-4, H.264 and DivX for video, and MP3, AAC and PCM for audio. Standard features include onscreen menu, EPG, closed caption and V-chip. An RS-232 port for firmware upgrade is another ubiquitous feature. Video output jacks consist of all or some of the following: HDMI, DVI, S-Video, D-Sub, component video, SCART and composite video. Audio output combines analog L/R audio, digital SPDIF and 5.1ch. For surround sound effect, Dolby Digital decoding is almost universally supported. USB, memory card reader, program recording, digital program copyright protection and CA/CI slot are optional in many models.

Prices are less than $20 for free-to-air (FTA) SD receivers, from $60 to $100 for FTA HD/SD receivers, and from $150 to $300 for HD/SD receivers with PVR.

Taiwan suppliers will continue to keep a close watch on trends as the digital switchover nears completion, with the terrestrial (DVB-T) global deadline set for 2012, the satellite (DVB-S) earlier in 2011 and cable (DVB-C) after 2012. Makers are also monitoring the IPTV market, which is also on a growth path based on its expanding customer base. The Topology Research Institute (TRI) estimates IPTV users worldwide, especially in Europe and North America, will increase in number by 50 percent between 2006 and 2010. TRI also points at mainland China and India as future expansion areas, with projections reaching 48 million IPTV users in 2009 and exceeding 70 million by 2010.

These developments are also acquiring for Taiwan companies OEM partnerships with leading STB companies such as Thomson, Pace and ADB. Among the beneficiaries of this type of setup are Foxconn Technology Group, AsusTek Computer Inc., Tatung Co., Gemtek Technology Co. Ltd, Cal-Comp Electronics and Communications Co. Ltd, Alpha Networks Inc., ZyXEL Communications Corp., Wistron NeWeb Corp., Comtrend Corp., Arcadyan Technology Corp. and Zinwell Corp.

Currently, production of digital and IP set-top boxes (STBs) continues on the uptrend in Taiwan, outrunning TVs boxes. In standard, Taiwan suppliers have widely adopted DVB-T based on the bulk of their STB shipments.

IP STBs with digital video recorder (DVR) function and HDTV support, on the other hand, are seen as the next market attraction. Among the Taiwan makers that have released such products is Zinwell. The company’s ZWD-2500T and ZWD-2500R models support up to 1080p resolution at 24fps/30fps. The market analyst expects that this multifunctionality trend, with added push from rising demand for home networking products, will transform IP STBs as home gateways. New models in this class expected to be released next year can support H.264 formats, in addition to MPEG-1, MPEG-2, MPEG-4, DivX and RealVideo (RM/RMVB). Broad connectivity and compatibility are two other design trends.

The current selection in Taiwan comes in various price offerings. Entry-level STBs with no HDDs are quoted at $20 to $60, while mainstream models can be priced at $20 to $30 on volume orders. Products that support multimedia home networking range in price from $70 to $80. HD STBs are at more than $90. STBs with PVR functions are priced at more than $200, depending on HDD capacity. TV boxes with DVB and IP support fetch between $20 and $30. Among Taiwan’s suppliers of TV boxes are TV tuner card and USB dongle companies such as KWorld Computer Corp. Ltd, VideoHome Technology Corp., AverMedia Group and Comprom Technology Inc.