TekPlus - Pace and Philips Innovate Digital TV Market

Consumers of digital TVs, Internet TVs, interactive TVs and any other form of TV-based entertainment or communication will seek added value as new developments take place. Backward and forward compatibility must be enabled together with interoperability to ensure consumers continue to put their hands in their pockets; otherwise they will not see the value and stick with what they’ve got. TVs have become so reliable that there is less need for consumers to change their set and the TV industry will need to make TV-based devices more compelling. However, consumers are a fickle lot and simply adding Internet access and wireless connectivity may not be enough to persuade them to upgrade. The solution must add value; consumers are now purchasing wide screen TVs because they believe the viewing experience is enhanced in the same way this has led to huge DVD sales. The industry needs to either make a product compelling enough to make consumers buy it or make them think that their life or an experience will be enhanced in some way.

Source: TekPlus

New Digital TV Market Stimuli

TekPlus initial findings, following recent developments of the digital TV market, show that growth is expected to grow to over 20 million digital TVs, or digitally enabled analogue TVs. This is a direct result of the intervention of the likes of Philips and Pace, but they are directing change from different angles. Philips has developed a chip that works with both digital TV standards, SDTV and HDTV, and can decode analogue signals to view on analogue TVs. The creation of one chip means that economies of scale are improved, drives down costs and helps reduce the price of decoding devices such as set-top boxes. Pace has developed a digital TV adaptor which can convert any analogue TV, enabling people to access free-to-air digital transmissions. The adapter cost £99.99 and has the added benefit of allowing people to access free digital channels without having to sign up to any payable subscriptions. The attractiveness of such a solution will depend on the demand to view free-to-air digital TV, but does not take into account users wishing to migrate to subscription TV, they will need to buy another decoder, however in such a case Pace may be able to do a deal with users that wish to migrate.

One other company has also recently made an announcement that heralds a reduction in the cost of digital TV decoders. Frontier Silicon of the UK, a fabless semiconductor chip company, is developing a single chip terrestrial DVB receiver excluding memory and RF circuitry, known as Logie. This chip is based on MPEG decode and META processor architecture licensed from Imagination Technologies and intellectual proprietary from TTPCom. This single chip is expected to also help drive down the cost of digital set-top boxes.

The Home Networking Market

Enabling a reduction in costs of digital decoders should also stimulate manufacturers and OEMs to enable Internet access through digital TVs. Adding Internet functionality to digital TVs will provide advertisers and content providers with added marketing opportunities and capabilities, providing a more interactive feel to consumers. However, the consumer will need to be provided with choice and a migration path to move them towards interactive TV and home networking solutions. Consumers will move to interactive TV and home networking at different rates, so decoder and digital TV manufacturers need to produce products that fit the different migration paths, depending on the consumer architecture in place. Companies involved in the digital TV market need to think ahead to the development of wireless LANs and the networked home in order to determine how their products fit into this migration path. This will enable them to decide what products they need to develop. Figure 1.1 shows some of routes that could be followed by customers wanting to migrate from a TV-based household towards a networked one.

Figure 1.1 Migration from Analogue to Digital TV and Beyond

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Pace and Philips Innovate Digital TV Market