The smart set-top box and dongle market is expected to pass 18 million units in 2013 - higher than originally forecasted due to the arrival of Google’s Chromecast device. Overall the market is expected to grow with a 10.8% CAGR (2013 to 2018) with less saturated and developing (from connected and OTT perspective) markets like Asia-Pacific and Latin America helping drive this growth.
Senior analyst Michael Inouye notes, "Despite stiff competition from a range of connected CE devices, the smart set-top box and dongle market offers an equally compelling user experience often at significantly lower price points. Google’s Chromecast device in particular sets a new low price bar for the connected CE market and as more applications are added to its library its value to price ratio will continue to grow."
In time, as the installed base of devices with new technologies like MHL grow we will start to see more dongle form factors in the smart set-top box market; although the puck will remain highly relevant.
The price of these devices will also allow lower tier TV manufacturers to separate the connected TV component, keeping prices lower and enabling customers the option to upgrade the connected platform as desired without replacing the TV or purchasing costly and proprietary upgrade modules.
Practice director Sam Rosen added, “If Sony secures the rights to distribute live cable channels from Viacom, partnerships such as this allude to a content future quite different from the one many are accustomed to today. Content holders are already forging more direct relationships to viewers and this would be a natural step forward, but the Pay TV operators are likewise evolving and adapting to this changing market environment. The amalgamation of Pay TV and OTT will become increasingly important, suggesting Google TV’s vision might have come too early but might grow into this role as a bridge or new entrants like Microsoft’s Xbox One might fully realize this unified vision.”