4/8/2008 -- How many times can one describe Cisco Systems Inc.'s (jaw-droppingly expensive) acquisition of Scientific-Atlanta as prescient? Not enough, apparently.

If market watcher Infonetics Research is correct, Cisco's $7 billion purchase of Scientific-Atlanta -- which catapulted Cisco from the enterprise wiring closet (or the SOHO desktop, via its Linksys subsidiary) to the consumer television set-top -- could soon be paying oodles of dividends.

According to Infonetics, the IPTV and switched digital video (SDV) market is growing at a double-digit clip, notching $9.8 billion in worldwide revenue. It's a growth spurt that should continue unabated, too.

"With each quarter, the battle for video subscribers gets more heated," said Jeff Heynen, directing analyst for IPTV at Infonetics Research, in a statement. "Buoyed by the success of rollouts by Orange, Free, Neuf, Fastweb, PCCW, Telefonica and China Telecom, IPTV service providers continue to build out headends and spend on IP set-top boxes to aggressively court video subscribers."

North American providers are busy as heck, too. "North American cable MSOs, such as Comcast and Cablevision, are leading the charge in switched digital video, to free up bandwidth and offer more HD content to their subscribers," Heynen said.

Elsewhere, Infonetics reports, IPTV and SDV equipment revenues reached $1.1 billion in the fourth quarter of last year. Meanwhile, worldwide IP set-top box revenues surged by 16 percent in Q4 (relative to Q3), and are expected to go supernova this year, according to the market watcher. At the same time, Infonetics projects, the number of IPTV subscribers could top 97 million by 2011.

In spite of its Scientific-Atlanta acquisition, Cisco isn't yet among the IPTV leaders. Motorola leads the overall market, according to Infonetics, while Microsoft controls the IPTV middleware and content delivery market. --Stephen Swoyer