Digital TV receiver prices to fall to 36 Euros by 2007

If a new report from Strategy Analytics is right, the price of digital terrestrial television receivers in Europe will fall to 36 Euros by 2007.

The report, entitled "DTTV Devices: Evolution, Segmentation and Scenarios," also advises that if manufacturers wish to sustain revenue growth in the digital TV market, they must develop multi-platform and combination products like personal video recorders (PVRs) and DVD recorders. Strategy Analytics, a global research and consulting firm, released the report late last month.

According to the study, demand for digital terrestrial television (DTTV) is showing signs of life in Europe. It points to the U.K.'s Freeview service and the switch-off of analog television in Berlin as indications acceptance of digital service is growing.

The number of European DTTV homes will double by the end of 2003 to 3.7 million, the group projects. Cheaper set top boxes, which now cost less than 100 Euros, are partly responsible for the demand. Intense competition among set top box suppliers will result in rapidly falling prices over the next few years.

"Prices like these could change the economics of the digital transition," says David Mercer, principal analyst at Strategy Analytics. "Governments around the world are keen to recover analog spectrum, but they should also note that substantial public subsidies will still be required in order to encourage universal digital adoption."

The report identifies a battle for revenue from the sales of future device shaping up between established vendors, such as Sony, Thomson and Pace, and emerging players like Humax, Micronik, Fusion and Netgem. It concludes the new players pose a threat to the bigger names by offering greater flexibility and responsiveness in product design and development.

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DTTV Set-top Boxes: Retail Price Projections End year 2003 2004 2005 2006 2007 Retail Price (Euros) 84.00 63.00 50.40 42.84 36.41 Retail Price (GBP) 61.35 46.01 36.81 31.29 26.60 Based on entry-level DTTV devices sold in Europe at constant 2003 exchange rates.

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