Settop boxes, part-2......................................
Infrastructure
Activity rising, but growth uneven <Picture>
The proliferation and production of digital set-top box products is expanding, but the activity is unevenly distributed throughout the world's markets. About 1.8 million digital set-top boxes were installed worldwide during 1997, the majority being in Europe, according to Dataquest. Some 8.08 million digital set-top units of all types are in use worldwide, mostly digital satellite receivers.
Indeed, in Europe, the production of digital set-top boxes is rising sharply in response to the anticipated commencement of new digital services in the region over the coming months. This sudden growth is happening despite delays to planned launches by some broadcasters.
In particular, new digital networks planned for Britain and Germany will be key drivers behind a take-off of the digital set-top box market. Until just a few months ago, market analyst Ovum was expecting 1998 shipments of around 1.8 million units in these countries alone -- countries which last year had no significant digital services. Although Ovum now considers this forecast to be overly optimistic, it is clear that the volumes will be substantial.
Cable operators across Europe are also planning moves to digital technology, largely in response to the competitive threat from the new satellite and terrestrial services. However, the pace at which they make the transition may be slower than had previously been predicted, according to John Moroney, principal consultant in the new media group at Ovum. "Cable companies are not particularly keen to rush into digital because of the costs," he said.For example, Britain's Cable & Wireless Communications, which is scheduled to begin consumer trials of digital services in June and commercial services later in the year, has still not decided when to switch over completely to digital. "We would expect to do a gradual roll-out, with digital and analog services operating in tandem for some time," said a spokesman.
Most of the set-top boxes available in the United States are still primarily analog models that provide little more than cable TV viewing. The United States has some 60 million cable TV subscribers, according to Dataquest, but less than 1 percent of those subscribers have a digital box.
But this is set to change. US-based manufacturer Scientific-Atlanta expects to ship up to 500,000 digital cable boxes this year and more than one million units next year. And General Instrument Corp. has sold more than 700,000 units of its DCT1000 analog cable boxes. The company has commitments to sell 15 million of its next-generation DCT5000 digital set-tops, which can be used for cable and satellite, according to marketing vice president Denton Kanouff.
Based on the low PC penetration in countries like Malaysia and Singapore, the market for set-top boxes that bring the Internet right into user's living rooms is expected to boom in the Asia-Pacific region. "The underlying factors such as price and ease of use will enable 90 percent to get on the Internet," said C.G. Low of Philips Singapore.
Philips is spearheading this effort with its MyWeb box. "The info-rich Internet platform has too long been for the technologically inclined, but with the advent of Philips' MyWeb, we are making it easier, less intimidating for the non-techno geeks," Low said.
Philips targets two user groups with the MyWeb. The first is made up of PC owners who are looking for alternatives, like surfing on a bigger screen at a distance. The second group consists of consumers who do not have PCs in the home. In Singapore, this second group accounts for 70 percent of the population, and in Malaysia, PC penetration in the home is only 5 percent. Thus, Low predicts a fast uptake rate in the second half of this year and is confident of moving 15,000 to 20,000 units by the end of the year.
In Korea, the market for digital set-top boxes is almost non-existent, so local electronics and telecom companies are not rushing into the line. In fact, two previous suppliers of Internet TV products have exited the field due to a lack of demand. Last December, Samsung Electronics Co. Ltd stopped mass producing its Internet TVs.
"Internet TVs have a lot of difficult problems. First of all, a maker has to offer constant service after sales, as well as provide regular updates for Internet and telecom emulation," said product planning division manager Jong Dae Lee. "Moreover, the infrastructure in overseas markets is considerably weak, and set-top boxes have a relatively small market."
LG Electronics tried to generate new demand in the Internet TV line by developing an economical model. But sales have nearly stopped. "Internet use is more reasonable on a PC than with a TV," said TV export division manager Kyu Min Han. "But in two or three years, large-screen PDP-type TVs of over 40 inches might create new demand in the Internet TV market."
Growing pains hit infrastructure
All of the key set-top box technologies are essentially mature, but as many companies involved in the line point out, the networking infrastructure -- and the content to run on it -- is not.
Hard evidence of this can be seen in the recent failure of a Taiwan government-funded VOD trial in the Hsinchu Scientific Park, called the Video Information Infrastructure Testbed (VIIT), involving a service size of just 200 families.
"VOD and NVOD (near video on demand) have not been successful worldwide because they were made on narrow band. A successful VOD service has to have a healthy network and a powerful server for video transmission," said Ting-ting Y. Lin, the deputy executive director of Digital Video Industry Development Program Office, which operates under Taiwan's Ministry of Economic Affairs.
Linche Cheng, general manager of the telecom division at Tatung Co., agreed that the missing link is in the installed network. "The infrastructure has to be ready -- then the services will get popular. First of all, the communication media has to be broadband," he said. "The speed for data processing has to be fast. Moreover, the display has to be clear to exactly show the products on a TV." Tatung was contracted to supply its TDS-403D set-top box for the VIIT.
Despite the difficulties, Taiwan's technology sector is far from giving up on the digital interactive TV market, and initiatives are underway to advance the cause of the industry. For instance, the Digital Video Industry Development Program Office was established to assist private domestic companies in evaluating various advanced technologies, approaching technology providers, and conducting discussions about industry cooperation or technology transfers.
"In the coming five years, North America will install about 10 million to 20 million terrestrial TV set-top boxes. We want to lead the infrastructure push by promoting digital TV, and Taiwan companies will be willing to make digital TV features on their set-top boxes," Lin said. "Currently, the profits on home electronics products and information products are very slim. But we hope our promotion of digital TV will create another big business opportunity for Taiwan companies."
Another catalyst for digital technology growth in Taiwan is the Computer & Communication Research Laboratories (CCL), part of the government-sponsored Industrial Technology Research Institute (ITRI). The CCL is in charge of transferring and implementing technology transferred from foreign countries.
Through these organizations, Taiwan will adopt the European digital satellite standard DVB-S and the DVB-C cable standard. The government is scheduled to decide which terrestrial standard to follow this months, but it is expected to be ATSC. The CCL has also developed set-top boxes for receiving content from cable and satellite services, and a terrestrial model will be announced in the third or fourth quarter. The European market, although currently the largest for digital set-top boxes, is also undergoing some infrastructure growing pains. In Britain, the start of digital satellite services is expected to depend crucially on the introduction of interactive services by broadcasters. Satellite broadcaster BSkyB intends to start transmissions of digital TV services this quarter, but Ovum's Moroney said that an even more important launch for this network will be when services such as home shopping and banking are introduced by BSkyB's associate, British Interactive Broadcasting (BIB). "BIB is the real player on the digital side," Moroney said. "And BIB is clearly not going to launch until later in the year."
Because digital set-top boxes for the BSkyB service are to be subsidized by BIB, their supply to the consumer market is likely to be delayed until the interactive services actually start.Delays are also expected in the introduction of digital terrestrial services in Britain, currently slated for around the third quarter of the year. Some technical problems still need to be addressed, Moroney said. "Terrestrial's still got a few hurdles to cross -- it's a new technology that still hasn't been fully demonstrated," he said. "I have every confidence that they will get the boxes to work, but there could still be a few difficulties."
Meanwhile, in Germany, some uncertainty now surrounds the timing of the launch of digital satellite services as a result of intervention by market regulators.
Production
Specs tailored to various market needs <Picture>
The full feature set of a set-top box depends very much upon the head-end system in use at the service operator. For this reason, box manufacturers often provide a wide range of specification and capability options, as well as multiple models, to conform to the broadcasting services being offered in their target markets.
European manufacturers are producing set-top boxes to a widely varying set of specifications for different broadcasting systems. The key variant is in the amount of interactivity and added services that broadcasters intend to build into their systems.
At the high end, British manufacturer Pace Micro Technology currently has put into trial a digital set-top box for cable systems using the WebTV operating system. The device has features comparable to a home PC, including a 167MHz central processor, a 1.1G hard disk, 8M of DRAM and 8M of ROM.For a more typical level of services, such as those provided by the French Canal+ satellite network, Pace Micro offers a version with 2M of DRAM and 2M of flash memory. This product supports basic interactive services, including home banking and home shopping, with a bank smart card reader and a V.23 modem.
Acer Inc. of Taiwan's AcerCyber TV adopts an open standard and a low-cost integrated platform. Compliant with the W3C Internet standard, the device does not require any setup or configuration to begin surfing the Internet. The CT-150 set-top box, one of the AcerCyber TV models, has a 133MHz CPU, a TV-tuner module and a 33.6Kbps/56Kbps modem. It also features NCTV Navigator 1.1.1, RealAudio, SmartCard and VBI support. A smart card option is available for conditional access.
Acer has been producing digital products for 20 years and wants to grab the opportunity in the field of digital home appliances. "Because of the opportunity, most of the competition conditions are reshuffling. Japanese companies will no longer dominate the market," said Roland Huang of Acer's consumer products business unit. Acer established this unit about two years ago for the development of products like set-top boxes, DVD drives and children's PCs. "Various living-room centered services and content for daily life will be introduced in the future. Set-top boxes will be the renaissance of TVs," Huang said.
In a slightly different niche of the interactive content segment, Taiwan's Proton Electronic Ind. Co. Ltd offers low-cost network computers (NCs) that work like dedicated Internet access boxes. "NCs can meet most people's needs at home, including browsing the Internet and performing word processing tasks, as well as using a videophone on the Internet with a camera," said Samuel Kuo, director of the computer network operating group.
Proton's Xavier features an ARM 7500FE 40MHz CPU and a 33.6Kbps modem or 10BaseT Ethernet card. The ARM chipset, consisting of a VGA controller, a south bridge and a north bridge, costs less than $30. The StrongARM 256MHz, which Proton plans to adopt in the middle of this year, is also priced at about $30, but it does not include other peripheral components.
The NC supports the software functions of Web browsing, e-mail access, HTML applications, Java, smart card authentication, SSL security, call waiting and audio play control. A printer connector is included, and customers can request a PCMCIA card interface. In the future, Proton will offer a CD-ROM connector and an MPEG-2 decoder. It is also developing ATM and ISDN models.
Proton has received orders for 50,000 units of its NC from Europe and Asia. It can accept custom orders, and no minimum order is required. Delivery can be made within three months.
General Instrument's current digital/analog DCT1000 set-top box features 64 QAM or 64/256 QAM modulation, MPEG-2, Dolby digital audio, and either a Starvue II RF return path or a Starfone telephone return path modem. Analog descrambling is optional.
The company's next-generation interactive digital box, the DCT5000, will feature an integrated MCNS cable modem, MPEG-2, Dolby digital audio, TV passcard security, a buffer option, an optional hard drive, a USB interface for connecting peripherals, a dual tuner for "watch-and-surf" capabilities and enhanced processing and graphics support. It will have the functionality to support VOD, NVOD and full Internet access. The unit also employs TDMA upstream to provide dedicated bandwidth for IP telephony, session-oriented gaming, file transfers and videoconferencing.
New applications call for more CPU power
Like in the PC industry, as component costs fall and new service operators become increasingly focused on the commercial potential of value-added services, the general trend in the design of digital set-top boxes will be toward greater processing power and more memory. The CPUs employed in set-top boxes range from basic x86-based chips to high-power RISC processors.
"The applications that people are currently developing are getting more and more demanding," said Pace Micro product marketing manager Jim Farmery. "They're wanting support for more graphics-intensive features."
Tatung offers the TDS-403D, a 32-bit, RISC-based digital set-top box equipped with a PowerPC 403 33MHz processor. It is capable of executing multilayer communication protocols, including ATM, for easy integration into fiber-to-the-curb access networks. Both IP and MPEG-2 data packets are converted to the ATM cell-switching format for unified network transport.
The system software of the set-top box is based on the newest version of Microware Systems' OS-9/DAVIC. Supporting DAVIC application protocols, the set-top box can be easily integrated with the video servers that implement DAVIC Uplink calls.
Tatung has also developed a simplified version, the TDS-403E, which contains built-in ATM and graphics processing capabilities, allowing data communication at 25Mbps to 35Mbps. The system, compliant with DAVIC 1.1 and DVB (Digital Video Broadcast) standards and including a function for conditional access, offers good compatibility with systems in North America, Europe and Asia.
Tatung can supply different communication interfaces to meet customers' needs, including ADSL and ATM. Moreover, functions are upgradable without the need to change the entire system, and the boxes will conform to ITU specifications. "The international standard is not final yet, so we are still groping," Cheng said.
Scientific-Atlanta has just begun shipping its two-way, realtime, interactive-capable digital set-top box -- the Explorer 2000. The advanced box features a 54 MIPS Sun MicroSPARC-2 RISC processor, MPEG-2 capabilities, a reverse path data transmitter for two-way communications in real time and a PowerTV operating system. A smart card slot for security and electronic commerce transactions is available, and a 10BaseT Ethernet interface is optional.
Scientific-Atlanta was contracted by Cable Television Laboratories Inc. (CableLabs) to assist the integration of new devices for the OpenCable specification project. The company will focus on end-to-end system integration, producing a network architecture reference model. It is designing three categories of head-end equipment of increasing complexity: digital satellite receivers and modulators to provide TV services; modulators and demodulators for two-way communications; and VOD and Internet-capable head-ends with combinations of Internet routers, Web servers and e-mail servers. "All those are available now and we're starting to ship," said Bob Van Orden, director of digital video systems.
The MyWeb from Philips is a hardware terminal similar to a PC, with unnecessary options taken out. According to Low, the MyWeb, which retails at about $374, marks the third paradigm shift in computing. "It is moving into something much easier and as close as one can get to literal plug-and-play," he said. The MyWeb was recently launched in Malaysia and Singapore under a partnership between Philips and MyWeb, a company based in Malaysia's Multimedia Super Corridor (MSC). The business model follows the concept of bundling hardware, Internet access and on-line services together to offer consumers a high value-added package for Internet access.
The MyWeb's processing power comes from AMD's 486-class 66MHz CPU, which Low said is more than sufficient for Web surfing and communications. It has 4M of RAM, with an option to upgrade to 8M, and 2M of ROM and 2M of flash ROM. Communications are handled by a 33.6Kbps modem that is upgradable to 56Kbps, and the box is controlled via a remote-control unit or a remote keyboard. "We have also added an option for users to replace the modem with an Ethernet card to allow the box to work with cable modem and normal LAN environments," Low said.
In addition, the unit is equipped with a Yamaha sound chip capable of playing audio files at 22kHz and 44kHz. The browser is an HTML 3.2-rendering engine that allows features like tables and frames to be displayed. Philips has also added a good measure of security to the model, including a security socket that complies with the SSL security encryption standard. In addition, a parallel port is available for connecting a printer or other peripherals like a Zip drive.
While cable and satellite set-top boxes are rising in performance, models designed for digital terrestrial services, which are unlikely to offer the same amount of interactive features, will likely be less powerful and sophisticated. Those being developed by Pace Micro for services in Britain, for example, will probably have 4M or less of memory.
TV, box convergence on far horizon
Digital technology not only enhances the audio and video quality of a TV, but also increases the efficiency of its use of the transmission channel. A digital TV can receive video, text and graphics and play four TV programs simultaneously. Thus, the prospects for digital TVs with interactive capabilities are clearly large.
Because the life span of a TV is about 12 years, and because the home penetration of TVs in most markets is very high, most companies do not yet see a big outlet for models with integrated interactivity capabilities. Currently, the most common way to receive value-added interactive services is via a set-top box. "Given that the TV penetration is already 100 percent, it will not be easy to sell another TV with the added functionality," said Philips' Low.
This will probably change in about five years, though, when digital TV services proliferate and most TVs will come with internal set-top box features. In the United States, digital TV services are expected to be widespread by 2006. Taiwan will start trial digital TV broadcasts at the end of this year.
As a set-top box and TV manufacturer, Proton plans to introduce a TV with built-in interactivity soon. But Kuo said this will not be a major model for the company. "Proton-brand TVs are not largely recognized worldwide. Besides, people who like Proton's TVs might not like Proton set-top boxes. And it is hard to maintain internal set-top boxes for users," he said.
Among US set-top box manufacturers, a big area of differentiation is in their level of commitment to the convergence of boxes and TV units, according to Dataquest senior analyst Jonathan Cassell. One company that is already moving in the integrated direction is General Instrument, which announced plans in January to develop digital TV technologies with Sony. The companies are discussing future generations of digital cable TV devices and HDTV products, as well as the incorporation of Sony's Home Network architecture into General Instrument's advanced digital set-top boxes.
One factor that might accelerate the convergence of set-top boxes and TVs is the launch of digital terrestrial TV services, according to Ovum's Moroney. "The service providers for satellite and cable might like to keep the hardware separate for a while, but I don't expect the same thing to happen with terrestrial," he said. "My guess is that integration will happen quickly for terrestrial services at least. Once digital terrestrial TV services start, I don't think I can imagine that television manufacturers will hold off on putting the functions into a single product."
Digital TVs for terrestrial services could make their appearance in the British market before the end of this year, Moroney predicts.
Research is also being applied to the integration of set-top box technologies to handle the decoding of digital signals from different delivery systems -- allowing one piece of equipment to handle cable, satellite, terrestrial and possibly even DVD input. SGS-Thomson is heading this way with the development of its next-generation set-top box chipsets. "The idea is that you can have add-in cards carrying out the front-end functions attached to a system board that includes the MPEG decoder," said a spokesman. "Potentially, you could use more than one delivery mechanism on the same system board."One problem holding back such integration, however, is the lack of compatibility between the conditional access systems and on-screen displays used by different services, the spokesman added. |
