Broadcom Introduces A Range Of New Products For The Chinese TV Market

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Earlier this week, Broadcom (NASDAQ:BRCM) announced a number of new products for the Chinese cable and set-top box market at the 23rd China Content Broadcasting Network exhibition, namely:

– A complete high-speed coaxial cable solution with new access technology for Chinese subscribers in multi-dwelling units (MDUs). The new chipsets (BCM63500 and BCM63333) allow Chinese cable operators to extend broadband services to home subscribers outside of China’s major coastal cities, particularly in densely-populated apartment buildings which are the under-served segment of the MDU market. Broadcom’s chipsets integrate the China HomePlug AV 1.0 standard endorsed by the State Administration of Radio, Film and Television (SARFT), the Chinese government agency overseeing broadcasting in the region, to provide operators with an economical solution for broadband services over cable.

– A new cost efficient, small form-factor set-top box (DOCSI 3.0) engineered for the growing cable market in China. The new platform is designed to deliver more advanced features to cable subscribers in the region, including over-the-top (OTT) video content, broadband data services, and both wired and wireless home networks. The small form-factor cable set-top box design reduces system cost and complexity, ultimately lowering development and deployment costs for China cable operators while increasing value-added services to home subscribers.

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– A new high definition (HD) set-top box SoC (BCM7228) for China’s free-to-air (FTA) satellite market which allows satellite TV operators to roll out more advanced services and additional HD satellite broadcast transmissions through the integration of Audio Video Coding Standard (AVS+) decompression.

Additionally, Inspur Group, Shandong Cable Network’s primary systems integrator, selected Broadcom’s Ultra HD SoC and Wi-Fi SoC for a new line of 4Kp60 cable set-top boxes.

In all, these releases and developments demonstrate Broadcom’s very strong position as a prime SoC supplier to set-top box manufacturers.

Our price estimate of $44 for Broadcom is almost in line with the current market price.

See Our Complete Analysis for Broadcom Here

Growing Digitization Drive In Emerging Economies; Broadcom Has Developed A Low-Cost Platform For These Markets

Backed by the ongoing digitization drive, the share of set-top-boxes shipped to emerging digital TV markets, such as India, China, Russia, and Latin America, is estimated to account for over 45% of the global set-top box shipments in 2015. ((Set-Top Boxes: Cable Digitization Driving the Market))

Digital cable TV is gaining popularity amongst TV viewers in the Asia-Pacific region, with approximately 40 million homes having migrated from analog to digital TV. A jump in cable and satellite set-top box shipments in the Asia-Pacific markets is being driven by cable digitization in India and China, as well as China’s rollout of digital satellite boxes to its rural households. Some analysts expect the Asia Pacific region to add 420 million new pay TV households by 2018. Most telecom operators in China are actively deploying technologies to deliver these services in key markets. [1]

Broadcom is a global leader in the set-top-box market and the segment is a large focal point for the company. [2] It has a full suite of mid- and high-end set-top box platforms providing a number of solutions for operators to offer to their subscribers. At a conference in Shanghai last year, Broadcom announced that India and China are critical markets for the company and it is inventing a set of new architecture for these emerging countries, keeping in mind the low average revenue per user (ARPUs) in the country. ((Digitization driving opportunities for us in India: Rajiv Kapur, Broadcom India, Financial Express, September 22, 2014))

We believe Broadcom is well positioned to benefit from the rising digital penetration in emerging markets, as well as a ramp to richer features, including multi-stream transcoding, more tuners and a stronger mix of MoCA-enabled platforms.

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Notes:
  1. China’s Inspur Selects Broadcom’s Set-Top Box, Zacks, March 24, 2014 []
  2. Digitisation driving opportunities for us in India: Rajiv Kapur, Broadcom India, Financial Express, September 22, 2014 []