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Can streaming sticks derail smart TV makers?

Posted: 18 Oct 2012 ?? ?Print Version ?Bookmark and Share

Keywords:streaming stick? USB? HDMI? the Consumer Electronics Show?

HDMI or USB based "stick products" that turn ordinary flat panel displays into streaming of smart TVs are starting to catch fire amongst China's fabless chip companies.

Several of China's chip companies specialising in multimedia processors which go into sticks have already lined up manufacturers to produce their stick products. There is already a USB-based stick called MuPad designed by Apexone, a fabless company based in Shenzen. Nufront, an applications processor specialist based in Beijing, is readying an HDMI-based stick.

Readers may have heard of the "Streaming Stick" first demonstrated by Roku at the Consumer Electronics Show in January. This month, Roku finally announced a commercial product priced at $99. Once plugged into the MHL port of Roku-ready TV, the stick adds streaming features to HDTV without a PC, a stand-alone set-top box or cables.

As far as I know, Roku is the only company offering streaming sticks in the U.S. Not a single, traditional CE company has discussed plans for such products. The silence is almost deafening.

Figure: Nufront's HDMI streaming stick.

Think about it, though. Why would Samsung, Panasonic, Sony or Sharp ever want to launch a $99 product? After all, they want consumers to shell out $600 to buy a new 40-inch smart TV.

'Nonexistent' market
For now, "This market is almost nonexistent," said Jordan Selburn, senior principal analyst at IHS iSuppli. The market researcher hasn't even bothered to release a market forecast.

"Almost nonexistent" wasn't my impression while reporting from China over the last several months, even it is true that there is no market yet in the west for stick products.

Selburn isn't entirely writing off the product category, however. "There are sufficient reasons to expect that the stick form-factor [product] could become quite popular, and it wouldn't surprise me if this became a major portion of the 'over-the-top' (OTT) segment."

Selburn defines OTT as a box used to access Internet content, as distinguished from STB, a traditional paid digital TV set-top box provided by the service operators.

Selburn assumes that stick products function as OTT boxes. The market, however, is still "quite small," he noted. OTT boxes, including home media streamers like Western Digital's box, are expected to ship about 12 million units this year, he estimated.

The market for stick "boxes" could be as high as 20 million units per year by 2016, Selburn estimated. While that figure strikes me as conservative, Selburn explained that not all OTT boxes will be replaced by sticks because many media boxes contain HDDs.

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