Companies like Alcatel-Lucent are working on system-on-chip design for set-top box (STB) whereby the STB functionality will reside inside the TV. There are both advantages as well as disadvantages in incorporating STB functionalities directly into televisions. For example, on one hand this can help operators reduce costs because they typically subsidize the STB. On the other hand, the STB technology will change much faster than the frequency with which consumers change their TVs. The consumers could therefore not be able to benefit from all the new enhancements.

There are certain new requirements in the home. There is need for a home gateway. That will be a separate item and not embedded necessarily inside the TV. The decoding capability is likely to move to the TV set. The trend we see is that certain bits of the set top box functionality will move inside the TV. The other bits of functionality will become richer and more powerful and become part of a home gateway. That could be good for IPTV because the cost for installation of IP TV will come down overtime. At the same time, functionality of the home gateway will enable new applications including wireless capability.