China's fabless IC sector is bullish on HDMI- or USB-based "stick products" designed to turn flat panels into streaming TVs. Does the product category have legs in the West?
TOKYO -- HDMI- or USB-based "stick products" that look like thumb drives are designed to turn ordinary flat panel displays into streaming or smart TVs. The emerging product category has caught fire recently among China's fabless chip companies, a development that caught me by surprise.
Many Chinese chip companies that design multimedia processors that
go into sticks have already lined up manufacturers to produce their stick products. I’ve seen a USB-based stick called
MuPad designed by Apexone, a fabless company based in Shenzhen. Nufront, an applications processor specialist based in Beijing, is readying an
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Inside Nufront's HDMI streaming 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 standalone 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.
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.