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Sales of DVRs to Triple by 2010, Study Predicts

February 21, 2006|From Bloomberg News

Scientific-Atlanta Inc., Motorola Inc. and EchoStar Communications Corp. will benefit most from projected gains in digital video recorder sales by 2010, an independent study said.

Sales of the recording devices and related software and services will more than triple to $1.3 billion in 2010, said the study released Monday by Carmel Group, a consultant. Digital video recorder revenue totaled $375 million in 2005, Carmel analyst Sean Badding said.

The devices are contained in set-top boxes sold by cable television and satellite broadcasters.

"Consumers are embracing this technology," Badding said. "Cable and satellite companies are using it as a marketing tool to compete with each other."

The devices are used to save TV shows for later viewing, pausing, rewinding and storage. Most of the recorders currently in use were sold by satellite TV companies including EchoStar's Dish network and DirecTV Group Inc., closely followed by cable companies including Comcast Corp. and Time Warner Inc., the study said.

Telecommunications companies including AT&T Inc. and Verizon Communications Inc. are starting to sell the service as they enter the cable TV market, Badding said.

Users of devices made by Scientific-Atlanta, the No. 2 U.S. maker of set-top boxes, will rise to 17.5 million by 2010 from 4.1 million in 2005, Badding estimated. Cisco Systems Inc., the biggest maker of networking equipment, is buying Lawrenceville, Ga.-based Scientific-Atlanta for $6.9 billion.

Users of video recorders made by Motorola, the world's second-largest mobile phone maker, will rise to 14.9 million in 2010 from 2.9 million today, Badding estimated. Users of devices made by EchoStar, the No. 2 U.S. satellite TV provider, will increase to 8.6 million from 3.4 million, he said.

TiVo Inc., the pioneer of digital video recorders, and DirecTV, the largest U.S. satellite broadcaster, also stand to benefit from the growth in digital video recorder sales, Badding said.

Digital video recorder users will increase to 41 million, or 37% of U.S. television households, by 2008, and to 56 million, or 49%, by 2010, Badding said. There were 16 million users, or 14% of U.S. TV households, at the end of 2005, the study said.

The 91-page study by the Carmel-based consultant was funded from publication, conference and consulting-contract revenue, Badding said. He said none of the funding came from video recorder companies.

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