Pace inched past Motorola in the pay-TV set-top box market during the past quarter, according to a new study from Infonetics Research, but the overall picture for the manufacturers is changing more than that small shift would indicate.

Infonetics attributed Pace’s increase to the fact that it offers solutions across telco, cable, and satellite operators. But the set-top box market generally held steady in the second quarter of 2011, with pockets of growth particularly Central and Latin America, down less than a percent to $3.45 billion.

What’s difficult to discern in that figure are the continuing declines in cable, IPTV, and hybrid IP/DTT set-top box sales. Infonetics determined that a strong set-top box upgrade cycle was ebbing in North America and Europe, and more consumers are watching TV online via over-the-top media players like Vudu, Roku Media Player, Boxee, AppleTV and others. For those reasons, Infonetics expects the overall set-top box market to peak in 2011 followed by overall annual declines in the single digits through 2015 and beyond.

This forecast is despite healthy growth in IP and hybrid IP set-top boxes, according to Teresa Mastrangelo, directing analyst for video at Infonetics Research.

“Pure IP STBs remain a bright spot with year-over-year global revenue growth at over 27 percent, as telcos are experiencing strong demand for their IP-based video services,” Mastrangelo said. “Looking forward, early signs indicate a robust period of opportunity is imminent for the hybrid IP segment, particularly in the cable market, as hybrid IP STBs have the same capabilities as standalone over-the-top players plus the added benefit of providing linear broadcast television programming.”

Other highlights of Infonetics’ report “Cable, Satellite, IPTV, and OTT Set-Top Boxes and Subscribers” include that Cisco holds a “commanding” lead in both revenue and units for IP STBs, Motorola leads in cable STB revenue, and Skyworth Digital leads in cable STB unit shipments. Also, the report said cable and satellite set-top box shipments continue to contribute the largest portion of set-top box revenue due to their large installed customer bases and operators’ ongoing upgrades to support digital video,high definition, DVR functions and more interactive features.

Related Link:

Photo of Pace booth at IBC 2010, courtesy of Pace