Dell’Oro Group reports that the worldwide set-top box market contracted 2 percent on a sequential basis in the third quarter of this year, despite strong growth in the IPTV and satellite set-top box market that was not enough to offset the decline in the cable market.

“Cable operators slowed their acquisition of set-top boxes in the third quarter after having accelerated purchases of mostly standard definition set-tops in the first half of 2007 when they were striving to convert analog subscribers to digital services before the FCC’s July 1st deadline that required that set-top boxes contain separate security modules,” commented Greg Collins, Vice President at Dell’Oro Group. “Because cable operators increased their purchases of set-tops ahead of demand, thereby building inventory, they had much less of a need to purchase new set-tops in 3Q07,” added Collins.

The report indicates that satellite set-top box market revenues grew faster than unit shipments in the third quarter as consumers continued to focus on high definition and DVR products and services. The IPTV set-top market grew in the mid-teens on a sequential basis on both a revenue and unit shipment perspective during the third quarter as well.