When the first iPhone launched in 2007, Steve Jobs famously said that it was "a revolutionary and magical product that is literally five years ahead of any other mobile phone."
Overnight, the mobile phone industry was turned upside down, and the brands of the old guard began their slow demise. But it wasn't just Nokia, Motorola, and Blackberry that the iPhone was an existential threat to; MP3 players, digital cameras, and navigation devices, as well as many others, were all consolidated into the smartphone, which increasingly represented more of a lifestyle than just a phone. Nowadays, smartphones are seldom primarily identified as a call making/receiving device.
Parachute 13 years into the future. With smart home devices and services increasingly abound, one would be forgiven for thinking the set-top box (STB) would have achieved something similar to the smartphone in terms of device consolidation. That has not yet happened. So far, vendors and operators have been focusing on incremental upgrades, such as streamer enablement, improved UIs, and higher resolution – and the other not-so-typical innovations, such as TV app stores. All of this will not be enough for the STB to stand out in the crowd of smart home and non-STB home media devices (i.e., streamers and smart TVs).
The set-top box will remain as long as cable is in the earth and satellites orbit in the skies, but the threat of it becoming a dumb device in the corner of the living home when everything else around it becomes smart should be sufficient motivation for vendors and operators to carve out a real, practical roadmap for the box to remain at the fore of the end-user's evolving home – just like how the smartphone is center-stage to the lives of many. The shift to "smart" for set-top boxes will be made from the necessity of staying relevant in the evolving home.
According to Omdia forecasts, over 70% of the global STB installed base will have some degree of connectivity, up from just half at end-2019. Connectivity will invariably improve – one can assume a chunk of these devices will be 5G compatible by 2030, which presents its own unique use cases. But for now, nobody knows for sure what exactly – from the array of smart devices – will the STB attempt to consolidate into itself. Industry conferences have seen various new smart services touted by STB vendors for a few years now, but many pass off as gimmicky and not sufficiently attractive enough for operators to entice their customers with.
With the proliferation in devices, consolidation of those devices will follow, especially during the latter part of this decade. Smart TVs, streamers, STBs, and handheld – not to mention smart speakers and other smart home devices – will give rise to "device fatigue." To that end, provided it can ward off the threat from smart TVs and streamers, the STB can position itself at the center of the smart home. As one vendor puts it, STBs will become smart media gateways. Should that happen, then, just like the phone in relation to making calls, the transformed set-top box might just be identified by services other than merely receiving video content. And if that happens, the 2020s will be the decade when home entertainment and the smart home converge.