Is the spring in the set-top box coming?

As a new profit growth point in the field of home appliances, has the spring of set-top boxes been coming? Can 2013 become the year of set-top box outbreak?

Skyworth intends to spin off the STB business?

On February 21st, Skyworth Group announced that it may acquire a company listed on the Shenzhen Stock Exchange. If the acquisition is successful, the company intends to inject certain assets and businesses (which may include the group's set-top box business) into the target company to facilitate the The major reorganization of assets.

For Skyworth, the set-top box business has become the Group’s second-largest business in the context of slowing growth in its television business. In the 2012 semi-annual report, the set-top box business ranked second with 12.3%, far more than white and LCD. The sum of other services such as modules. At the same time, the set-top box business grew faster than 30.94% year-on-year.

It is understood that Shenzhen Microput Information Technology Co., Ltd. (hereinafter referred to as Microput) is currently responsible for the development and operation of the Skyworth set-top box business. The company's shares are held by Skyworth Digital with 95% and Weipute executives hold 5% of shares. In addition, Weipute also operates China Mobile’s mobile MM store.

According to the previous earnings report released by Skyworth Digital, Skyworth set-top boxes have reached 16 million units in 2012, of which overseas markets accounted for 10 million units. Currently, sales in Southeast Asia, South America, and India have performed well. In fact, Skyworth Digital, which has started mass production of set-top boxes since 2001, has become China's largest set-top box supplier. According to the survey data of Glan Research, in 2012, Skyworth ranked No. 1 in the domestic cable set-top box market share and market share, and the high-definition set-top box market also took the second place to 8 percent in the same continent.

Set-top boxes and smart TVs are not competitive

"Last year was the first year of the OTT box, and 2013 may be a big year." Long Shiping, general manager of Microput, presented the author with Skyworth's latest set-top box product i Kan A6. The product is equipped with a 1G CPU and DDR3 1G memory, which integrates many features of well-known products on the market. It also takes a lot of effort in user interaction experience and UI/UE. "The chip is HiSilicon. Our next chip is ready to use the All-Chip single-core A8 chip."

"I think the set-top box is replaced by a DVD player. It is complementary to the TV." Long Shiyi believes that in the long run, smart TV is still the future trend, but it still has a long time to fully popularize. For the domestic market, televisions are large items in home appliances. The replacement period of televisions is usually 7 to 8 years, and consumers will not change frequently. The set-top box, which is only a few hundred dollars, is a very beneficial supplement to smart TVs, and the box can be continuously updated on hardware.

After the development of set-top boxes in recent years, CPU frequency from 300M to 1G to 1.5G, hardware upgrades are very fast. The product form has also undergone great changes. From the simple high-definition video playback and limited playback resources in the past to the massive amount of Android applications, video resources, and multi-screen interactions with PCs and mobile phones, the user experience has been rapidly improved. At present, many domestic set-top box manufacturers have begun to learn from the successful experience of the Apple box, set-top boxes from the past single-function products to the "three-screen integration" direction to build.

Set-top box policy risks remain

In 2012, the Xiaomi box was blocked and became a landmark event in the development of the OTT box. As Apple’s best imitator in China, Xiaomi has been trying to copy the success of his mobile phone to another industry. On November 14, 2012, Xiaomi Company officially released a TV set-top box millet box. Millet box uses Android 4.0 system, supports up to 1080P HD output. The function is similar to Apple's Apple TV: Through this product, users can share all kinds of content on the Internet, including video, pictures, music, and can interconnect various devices such as mobile phones, PADs, PCs and televisions.

In the publicity, although millet called this product "the most feverish accessories ever made by Xiaomi Mobile Phone." But people in the industry know that this is a 100% TV set-top box. At present, SARFT has issued a total of seven Internet TV licenses, including China Internet Television (CNTV), Shanghai Media Group, Huada, Southern Media, Hunan TV, China International Radio, and China National Radio. Although Xiaohua’s partner Hangzhou Huashu has a license, its selling point is that it can watch the contents of seven video agencies including Tencent, PPTV, Sohu, Huadian, Thunder, and Phoenix. This is in violation of the "Document 181" issued by Radio and TV in 2011, because the set-top box can only have built-in content that is exclusive to Internet TV licensees.

"Millet fired up OTT and sacrificed himself, but the industry has paid attention. The problem is that it is too high-profile, so high-profile to promote the product, and the product has obvious violation of the rules." Long Shiyi said. From the perspective of user experience, putting only one video content is obviously not as good as placing multiple contents. Open Taobao, enter the "set-top box" keywords, all of a sudden there are more than 80 set-top box brands, prices generally ranging from 199 to 599 yuan. Among them, brands such as Haimeidi, Kaiboer, Infik, Tianmin, Diomeute, and the United States were among the earliest manufacturers of set-top boxes. Faced with changes in policy and market environment, these brutal growth of set-top box brands are now seeking "Start trying to cooperate with the licensee. However, most of these set-top boxes also have a lot of video content built in, and there are different degrees of violations.

In addition to non-compliance, there is a way to circumvent policy risks, that is, only one video content is built into the factory pre-installation process, and then the download link for other content parties is provided for users to download freely. "It's okay to download it yourself, because it's a user behavior." Long Shiyi said that future set-top box products sold by Skyworth open channels will use this approach.

Set-top boxes need to find a good business model as soon as possible

In addition to policy risks, low profits are also a problem that has plagued the development of the set-top box industry. It is understood that similar products such as millet boxes are mostly sold in Taobao 200 to 300 yuan, if you go to the ground channel, manufacturers do not have much profit, the market price war fight very fierce. In addition, there are still cheaper TV sticks such products also began to grab the share of set-top boxes, but its user experience and set-top boxes are still a certain gap. Compared with these low-price-based products, LETV is the industry's heterogeneous, its T1 model is currently the official price of 1980 yuan, pricing is much higher than their peers. LETV is emboldened by the fact that LeTV.com is the largest publisher of film and television copyright networks in the country and has exclusive control of a large number of genuine film and television dramas. The reason why the price is so high is that the copyright fee is mainly converted into hardware. Long Shiyi believes that copyright fees are definitely the future trend, but hardware prices should not be too high. At present, manufacturers including LETV in the business model have not yet found a good business model. Should allow users to form a certain use habits through free content, and at the same time provide paid content for a small number of VIP users, so that it gradually came to educate the market. According to reports, Skyworth's latest i Kan A6 will be priced at around 600 yuan. This pricing may be to find a balance between market competition and profits.

"Only the hardware has no added value. Samsung's mobile phones are not very different from domestic mobile phones in terms of hardware. The reason why they are sold well is mainly through software and design." Long Shiyi believes that in the future competition for set-top boxes, software and design will become important competitiveness, and copyrighted content is the core. He also hopes to open the payment and payment link and achieve a better business model.