The number of subscribers to Internet Protocol Television (IPTV) services worldwide is expected to nearly triple in 2007, helping to drive a strong increase in sales of wired communications equipment and related semiconductors for the year, iSuppli Corp predicts.
IPTV brings new capabilities to television entertainment, including interactivity, integration with voice and data communications, personalisation and value-added services. With the arrival of more competitors in the market, the variety and pricing of IPTV services willimprove for consumers, iSuppli predicts.
The year 2007 represents an inflection point for IPTV where the technology will no longer be only for early adopters but those in mass market will also jump on board said Steve Rago, principal analyst for networking and optical communications at iSuppli. This IPTV transition is occurring simultaneously around the worldso everywhere regionally will see an increase in subscribers."
Global IPTV subscribers will soar to 14.5 million in 2007up a stunning 192.4 per cent from 4.9 million in 2006iSuppli predicts. By 2010worldwide IPTV subscribers will amount to 63 millionRago said.
As the number of IPTV subscribers growstelecommunications companies will spend more on equipment that can increase network bandwidth and capacity. Partly because of the IPTV surgeglobal factory revenue for wired communications gear will rise to $101.4 billion in 2007up 7.2 per cent from $94.6 billion in 2006. This growth rate is nearly double the 3.7 per cent expansion in 2006.
Moving up another level of the supply chainsemiconductor sales to the wired communications gear market also will benefit from IPTV's ascendance. Global revenue for wired-communications-orientated semiconductors will expand to $19.4 billion in 2007up 18.3 per cent from $16.4 billion in 2006. In comparisonchip revenue to the wired gear market grew by only 10 per cent in 2006.
Equipment winners in 2007
Because of the expected growth in IPTV subscribers and the telecommunications companies' purchasing of equipment in order to increase their bandwidth and capacitydemand for optical networking equipment is expected to rise dramatically in 2007. Long-haul optical WAN equipment will be the top-performing sector of the global wired communications networking equipment market in 2007with factory revenue rising to $2.7 billion in 2007up 40 per cent from $1.9 billion in 2006.
The impact of IPTV and video on wired network communications gear spending is widespreadwith six of the seven top segments of the market receiving a sales boost due to the technology's rise.
"The only segments that will not being driven by IPTV and video in 2007 is the LAN switches and hubs area Rago said. This broad-based boost will offer copious opportunity for networking gear makers in 2007."
Enterprise networking in 2007
The enterprise networking market is being led by the continued growth of the LAN switching segment. iSuppli is forecasting 25 percent growth in 2007 for LAN switching gearup from 13 per cent growth in 2006. Driving this growth is the conversion to Gigabit Ethernetcoupled with strong demand for new enterprise networks in regions outside of North America.
The winners in the IPTV supply chain will be those companies that can provide innovative solutions that enable telecommunications companies to achieve their vision of becoming the multimedia service providers of choice to consumers.
For those targeting the LAN switch spaceiSuppli expects the market leaders of 2006 will continue to dominate in 2007. Newcomers to this market will find it very hard to displace the incumbents.
For more informationvisit www.isuppli.com
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