LG Predicts A $50 DTV Set-Top Box By 2008

[Gregg Lengling]

By Greg Tarr -- TWICE, 8/23/2004

WASHINGTON — Consumer prices for basic digital-to-analog (D-to-A) converter boxes that will enable standard analog televisions to display digital television (DTV) signals should hit retail prices of $50 to $70 within four years.

This is according to a top executive with LG Electronics' Zenith Electronics company, which developed the key modulation technology in the DTV broadcast standard.

Richard Lewis, Zenith Electronics' research and technology senior VP, made the projection in remarks submitted to the Federal Communications Commission's Media Bureau.

The bureau is seeking comments on options for minimizing disruption and accelerating the transition to DTV for consumers who rely on over-the-air analog television service.

Lewis said that LG expects consumer prices for digital-to-analog converter boxes will compare favorably "with prices for DVD players" by 2008.

"Of course, by that date, there will be a range of options... Those who want high-definition reception and other features will pay more, just as they do today for progressive-scan DVD players."

Lewis added a caveat that the $50-$70 entry price point is based on expectations of "annual sales volume in the tens of millions of units and the estimated licensing fees" of about $10 to $15 per unit.

He also said LG expects pricing on basic set-top D-to-A converter boxes to drop below $100 by late next year.

The scaled-down D-to-A converter box envisioned by LG Electronics "will receive and demodulate all 18 formats of the ATSC DTV standard, but it will output only low-resolution analog signals via base and/or radio frequency jack," Lewis said.

He added the box would have "essentially the same components, plus a low-cost DTV tuner."

Lewis said the FCC's DTV tuner mandate for a phased-in inclusion of DTV tuners in all television receivers 13 inches and larger by 2007 is expected to "exponentially drive down the costs of ATSC chipsets to the point that a digital tuner three years from now should cost about the same as an analog TV circuitry today."

Lewis said his forecast is based on "conservative estimates" of 80 million-plus analog television receivers in the United States today that rely upon over-the-air service, and are not connected to a cable or satellite provider.

"We expect that while many consumers will replace these analog TVs with new, integrated DTV sets, many others will wish to continue to use their analog sets, thereby providing a viable market for the production of a large volume of low-cost converter boxes," Lewis said.

Another factor in keeping prices low is licensing fees for patents held by companies that developed key technologies in the digital broadcast system.