Captive customers base of 'cable alternative' service providers - ie telco service providers. Whether VDSL/FTTN, FTTP/FiOS or other high-speed internet delivery system, IPTV will gain popularity as a cost-effective competitor of cable and satellite, as the pipeline required to deliver IPTV will provide added bandwidth for complementary services and facilitate the quality and quantity of VoIP devices.
2H 2007 assumed, exact date unknown.
Pricing and Availability
Pricing for this kind of product (at the consumer level) is meaningless as it is a completely subsidized part of a service package. IPTV set-top boxes are typically rented out to subscribers on a monthly schedule in accordance with the service contract which may vary between various markets. Since the device cannot function without being properly set-up by a service provider, after-market product and prices have no validity.
The product should be available in the US (via AT&T's Uverse offering) and Canada (via Telus). It may be available more broadly but no specific evidence was found.
For the purposes of this teardown analysis, we have assumed that Cisco will produce 2.5 million units of this STB during the product lifetime. This volume level is highly dependent on market acceptance and penetration of IPTV technology, therefore, actual final production volume may differ dramatically.
As a reminder, teardown volume production assumptions are primarily used for our cost analysis in terms of amortized NRE and tooling costs, especially for custom components specific to the model being analyzed (mechanical components especially). Unless assumed, volumes increment by an order of magnitude. Minor changes in volume (say 1 million vs. 2) rarely have a large net effect on our final analysis.
Function / Performance
No performance testing was performed.
Our cost analysis includes the main unit, including power supply and power cord, but excluding other accessories (mostly A/V cords) and other box contents (literature, packaging, etc.). The total materials and manufacturing costs reported in this analysis reflect ONLY the direct materials cost (from component vendors and assorted EMS providers), AND manufacturing and test. Not included in this analysis are costs above and beyond the material manufacture of the core device itself, cost of intellectual property, royalties and licensing fees (those not already included into the per component price), software, software loading and test, shipping, logistics marketing and other channel costs including not only EMS provider and the OEM's margin, but that of other resellers. Our cost analysis is meant to focus on those costs incurred in the manufacture of the core device and exceptionally in some circumstances the packaging and literature as well.
Country of Origin / Volume Assumptions
Markings indicate that the Cisco IPTV box was manufactured in China. Furthermore, we have assumed that custom mechanicals (plastics, metals, etc.) were also sourced in China to take advantage of lower cost structures there.
Manufacturing costs are calculated (modeled) on a per component basis for auto 'pick and place' insertion costs as well as 'hand inserted' assembly costs (all components are in one category or the other). Local, burdened labor rates are applied for all hand assembly and test operator cycle times, and in the case of pick and place our model differentiates regional cost structures. In addition test costs are calculated for devices which are not delivered as finished assemblies (hard drives, optical drives, some pointing devices, 802.11 cards, etc.). Overhead is a percentage calculation based on total cost of the device.
Design for Manufacturing / Device Complexity
We tend to use component counts as the one measurable and clearly defined 'metric' by which we can compare and judge the relative complexity of devices and comment as to where a given device fits in the spectrum of overall manufacturing cost and complexity between devices.
The Cisco IPN430MC IPTV set-top has an approximate total component count of 1100 of which 65 are mechanical components. Due to the simple form factor of IPTV set-tops, the components count correlate closely to its feature set. The IPN430MC is no exception to this rule and the component count (both mechanical and electronic) is in-line with other IP STBs iSuppli have analyzed in the past.
Component counts have a direct bearing on the overall manufacturing cycle times and costs, and also can increase or decrease overall yields and re-work. Our calculations of manufacturing costs factor counts and more qualitative complexities in the design. The cost of manufacturing is also, to some extent, decreased in this case because of assumed labor rate applied for China.
Note that manual labor has a much smaller effect on auto-insertion assembly lines (for the Main PCB, for example), where manufacturing costs are much more capital equipment intensive and driven by these investment costs.
With a few peripheral exceptions (HomePNA 3 functionality notably), this IPTV set-top box fundamentally resembles other conventional digital terrestrial and satellite set-top boxes. Notably, the lack of need for demodulators and tuners work to simplify the overall design resulting in a more highly integrated STB. This is mainly due to the fact that the Cisco IPN430MC is, unlike previously analyzed hybrid IPTV STBs, a pure IP implementation [e.g. IPTV protocol used for both broadcast and VOD content]. The core silicon in this design is the a Sigma Designs media processor. The bulk of satellite and terrestrial MPEG decoders we have seen were manufactured by ST Microelectronics - by far the most frequently seen in boxes analyzed by iSuppli.
The rest of the design features primarily networking IC / interface ICs - Coppergate HomePNA 3 digital IC (CG3011), and Marvell Ethernet switch (88E6035).
The hard drive is an Ultra ATA, 7200rpm. Most other devices seen in the last year or so have already transitioned to SATA drives. Power supply is an external unit (42 watt).
Sigma Designs - SMP8634LF - Media Processor - MPEG-4.10 (H.264), SMPTE 421M (VC-1)
I/O & Interface
HomePNA 3.0 - CopperGate - CG3011QIR-10 - Digital IC
Ethernet Switch - Marvell - 88E6061-LAJ1 - 6-Port
HDMI Transmitter - Silicon Image - Sil9002CSU - V1.2 PHY
MCU - Freescale - MC9S08RD16DWE - 8-Bit, HCS08 Core
SDRAM - Qimonda - HYB25DC256160CE-5 - DDR, 256Mb (16Mx16), 200MHz, 2.5V
Flash - Spansion - S29AL016D70TFI02 - NOR, 16Mb, 3.0V, 70ns
Front End - Analog Devices - AD9865BCP - Mixed Signal, Broadband
Western Digital - WD1600BB - 160 GB, 3.5', PATA, 7200 RPM, 2 MB Buffer