For the past half-decade or so, set-top boxes have been getting smarter. Not the ones provided by cable companies, but boxes from Roku and other companies have been trying to provide quality streaming services to living rooms for years. Now, in an era when nearly all new TV sets have ethernet ports and Netflix apps pre-installed, how will the boxes that led us here fare? Pretty well, if new analyst numbers are to be believed.

ABI Research today predicted that the “smart” set-top box and dongle market will ship 18 million units by the end of the year. This prediction is higher than one made earlier this year, specifically because the dongle sub-category has been pioneered by Google. One month ago, Google announced its Chromecast dongle for TVs. The device is designed to stream contend from mobile devices onto TV screens (though apparently only approved content).

The overall set-top box and dongle market, ABI predicts, will grow 10.8% between now and 2018. This modest growth will mainly come from emerging markets in Asia and Latin America. Dongle devices in particular are predicted to take off, with low prices driving demand and pressuring TV manufacturers to keep software costs down. The eventual break-up of regional cable monopolies will also play into the need for low-priced set-top and dongle streaming TV solutions.

“If Sony secures the rights to distribute live cable channels from Viacom, partnerships such as this allude to a content future quite different from the one many are accustomed to today,” said Sam Rosen, practice director at ABI. “Content holders are already forging more direct relationships to viewers and this would be a natural step forward, but the Pay TV operators are likewise evolving and adapting to this changing market environment. The amalgamation of Pay TV and OTT will become increasingly important, suggesting Google TV’s vision might have come too early but might grow into this role as a bridge or new entrants like Microsoft’s Xbox One might fully realize this unified vision.”

(Image courtesy Google)