LONDON -- In Europe the lowest-cost digital terrestrial television (DTTV) receivers are set to plummet in price to 36 euros by 2007 (about US$40 at today's exchange rates) due to price competition following acceleration in the take up of digital services, according to market research firm Strategy Analytics Inc.
The research covers units offered as set-top-boxes although increasingly full-featured television receivers are likely to include digital reception. Strategy Analytics predicted that the number of European homes with DTTV would double in the second half of 2003, reaching 3.7 million.
Thereafter the entry-level price for DTTV is set to move from 84 euros at the end of 2003 to 64 euros at the end of 2004, to 50 euro at the end of 2005 and to 43 euros at the end of 2006, the market research firm predicted.
Demand for DTTV services is taking off in Europe with success stories including the Freeview service in the United Kingdom and the switch-off of analogue television in Berlin, the company said. It also predicted a battle between established suppliers including Sony, Thomson and Pace and emerging players, such as Humax, Micronik, Fusion and Netgem.
"Prices like these could change the economics of the digital transition," said David Mercer, a principal analyst at Strategy Analytics. "Governments around the world are keen to recover analogue spectrum, but they should also note that substantial public subsidies will still be required in order to encourage universal digital adoption," he added.
The company suggests that manufacturers need to develop multi-platform and combination products such as Personal Video Recorders (PVRs) and DVD recorders to sustain revenue growth. Strategy Analytics concluded that the new players pose a threat to the bigger names by offering greater flexibility and responsiveness in product design and development.