Apple TV Jumps to 3rd in Set-Top Shipments, on Slipping Pay-TV Demand, Says IHS

Worldwide set-top box shipments grew 4.8 percent last year to reach 353 million units, said IHS, but revenue fell 5.4 percent to $22.2 billion due to lower demand for higher cost pay-TV set-top boxes in North America, said an IHS report Tuesday. Apple TV, ranked ninth globally in revenue among set-tops in 2014, jumped to third in 2015 due to industry consolidation and continued strong growth in consumer retail video streaming players, said the report. More than 10 million Apple TVs shipped last year, behind Arris (which acquired Pace), Technicolor (which acquired Cisco's set-top business), Skyworth and ZTE, said IHS. Apple TV’s success results from “translating consumption habits from across Apple’s wider device ecosystem onto the TV screen,” said analyst Daniel Simmons, saying Steve Jobs once called the Apple TV business a “hobby.” Apple TV’s rise in the set-top category reflects the trend that pay-TV-specific boxes “are becoming less important for consumers to access premium content” because Netflix, HBO Go and others offer top-tier content through over-the-top boxes, said Simmons. “As retail STBs have grown in the market, traditional pay-TV set-top vendors have been forced to re-position themselves, with significant consolidation at the top of the market, diversification toward software and services in the middle, and low-end vendors moving toward broader volume.” Global growth of set-top shipments was driven by IPTV in China, where telecom companies are pushing IPTV services to fund investments in fiber-to-the home for high-speed internet access, said IHS. Global set-top Q4 revenue grew by 3.4 percent over the year-ago quarter to $5.7 billion, partly driven by Apple, Amazon and Roku device refreshes, said IHS.