Digital Cable-Ready TVs Are Here, but How Will They Sell, Asks ABI Research?

OYSTER BAY, N.Y. -- This month, consumers in the market for high-end television sets have a new option: digital cable-ready (DCR) TVs. These high-tech new models accept a credit card-sized circuit card that lets them receive digital television signals from a cable provider without the need for an expensive and bulky set-top box.

Customers will buy the TV of their choosing, then contact their cable service operator for the proprietary digital cable card. Installation is as simple as pushing the card into a slot in the television. This should mean lowered costs for cable companies, and for consumers.

According to Vamsi Sistla, director of broadband research at ABI Research, the consumer electronics industry is "bullish" in its sales estimates, expecting to move a million of the new models by the end of this year. Sistla, who has recently completed a study of this new technology, is more cautious, forecasting sales around 840,000 units at the high-end.

There are several reasons for his caution. This first generation of DCR TV cards only offers one-way communication but, says Sistla, "high-end consumers want to have interactive features: video on demand, pay-per-view. Probably by the end of next year or mid- 2006 you will see interactive DCR-2. According to my forecast, that's when the sales enter the mass adoption."

Sistla concludes that, "The ball is in the consumers' court. Will they find value in these TVs and buy them or wait until two-way ready TVs hit the market? Only a handful of tech-savvy consumers are aware of them today. Interested parties should start to invest in advertising and marketing collateral to educate the consumer. With proper promotions and marketing strategies between cable MSOs and CE industry, cable industry could pump new energy into the digital cable industry in the US."

The research is part of the latest update of ABI Research's "Digital Set-Top Box Quarterly Service", which examines the global trends in shipments, revenue, and penetration of advanced features for various distribution networks, including: digital cable, DBS, digital, terrestrial, and DSL & IP-based networks.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.3113.