The concept of digi-home is getting hot recently. According to In-Stat’s forecast, revenue of global digi-home market will reach $20 billion in 2009, and the Asia-Pacific region will be the fastest growing market, including China market, which CAGR is 30%. It is estimated that 37 million families in Asia will use digi-home application through their home network in 2009. Actually, “digi-home” is mentioned so many times by more and more people this year under different circumstances in China. Chip venders such as Intel and TI launched their solution system; Linksys, D-link and other network equipment venders are trying to enter the low-end family market; venders including Haier and TCL launched their family multimedia center; and entertainment operator Shanda released its Shanda box this July. It seems that the industry value chain of China digi-home market has formed out. However, In-Stat believes that there are two key factors will help to form a energetic eco-system of digi-home in China. They are the amount of subscribers and network capacity for digi-home’s application.
Only the telecom operators in China could solve two problems.
Operators have the precious resources including the subscribers and networks which the others do not have, as we mention above. A certain mount of subscribers will bring stable revenue, which means the cost will decrease as the scale increase, and know customer demand deeply. So chip vendors and equipment vendors are eager to invite operators to cooperate with them. While content and service providers are lack of channel on the network. Through digi-home’s 3 developing phases, from sharing bandwidth at the beginning, and the demand to content, to realizing intelligent home and remote controlling later, operators’ network and QoS are needed all the time. Therefore, operators are playing an very important role in the whole digi-home eco-system.
What does the digi-home mean for operators?
Meanwhile, domestic operators also need digi-home market to help their transformation in market and their development, especially broad band network operators. In the transformation, operators are trying to spread their services vertically. In vertical industry market, operators want to provide series of data, voice, and video service. But confronting with their former clients, operators do not have enough experiences to run the service, so resistances in the industry are inevitable. Instead, if operators turn to yield a new family market, using broadband access, providing with secure services, multimedia contents, further remote controlling and etc., Taking these measures could help operators spread their value chain and easily carry out transformation in market.
Will operators take the monopoly market in the future?
In the industry value chain there are still potential competitors. Taking entertainment operator Shanda for example, since it allied with Universal Entertainment as strategic partnership in April 2005, to launch Shanda Box in July, it takes measures one after another aiming for family digital entertainment market. Through this Shanda could win the huge family market in China. If operators wish to avoid the situation happening, there should be some drastic measures taken at once.
Above all, In-Stat believes that China operators are in key role in the digi-home market. The shaping and developing of digi-home industry value chain need contributions of operators. At the same time, the chance they bring in could increase profits for operators, and it will help operators’ transforming into value-added service providers. Besides, potential competitors’ threat also forces operators to carry out as soon as possible.