QualcommÂ’'s entry into STB chip market challenges incumbents

El SEGUNDO, USA: Qualcomm is muscling its way into the STB chip business, a move likely to shake up the marketÂ’s competitive landscape, according to insights from the Consumer Electronics Service at IHS.

Qualcomm is a serious contender to the current STB duopoly held by Broadcom, also from Southern California, and French-Italian maker STMicroelectronics. Both Broadcom and STM sit atop the $2 billion market for set-top box processors

“For several years now, the lucrative market for STB audio-visual processors has been dominated by Broadcom and STM:” said Jordan Selburn, senior principal analyst, consumer platforms, at IHS.

“While a handful of vendors also competed, mostly with chips targeted at lower-performance systems, the two powerhouses virtually owned the high-end market and accounted for roughly 80 percent of total STB processor revenue. Now, Qualcomm has entered the STB market, and the incumbent leaders will face a serious challenger that has its sights set on domination.”

Dragon tale

Qualcomm is entering the STB space via the Snapdragon 600 MPQ8064, a chip featuring the companyÂ’s quad-core version of an ARM-based architecture called Krait. The chip can process HEVC of a 1080p high-definition signal, though not the next-generation UHD signals. HEVC compresses media content more than current standards, allowing for more channels, faster downloads and higher image quality.

In September, Qualcomm announced it was partnering with Technicolor, a top-tier STB manufacturer based in France with a US subsidiary in Boston, to power the Svelte box. The Snapdragon 600 will be inside the Svelte box, which will feature 4G Long Term Evolution, the first time the next-generation broadband connectivity standard will be available on a set-top box for the market.

Mobile chip domination

Qualcomm already owns more than one-half of the market for mobile equipment baseband integrated circuits, with its chips used in prominent devices like the Apple iPhone and iPad.The market for STB chips is sizable, and it is a space in which Qualcomm already has a great deal of expertise in the key required functions.

More importantly, the sub-segments being targeted by Qualcomm, including home multimedia gateways, thin clients and residential gateways, are nearly greenfield opportunities where the well-established incumbents may have less of an advantage.

BroadcomÂ’'s advantages

Of the marketÂ’s current top two players, Broadcom has currently established itself as the player to beat for state-of-the-art performance.

The companyÂ’'s chips were pervasive in demonstrations for ultra-high-definition TV decoding at the IBC Conference in Amsterdam held recently in September. At present, only BroadcomÂ’s flagship chip can handle UHD/HEVC signals, though QualcommÂ’s next generation Snapdragon 800 should be able to do so as well.

Industry revenue for advanced chips will begin to ramp up significantly in 2015 and beyond, but the battle for the market has already begun.