Altron has confirmed it is closing the Altech Node business. The Altron group told ITWeb in a statement that after exploring various alternatives including partnerships, it decided to close down operations for the Node and terminate all agreements and services associated with the device.
"Unfavourable conditions such as the current economic environment which is putting pressure on the consumer and increased competition in the video-on-demand (VOD) environment have necessitated us to make the difficult decision to close the Altech Node business. We will however retain the technology within the group," says Altron CEO, Robert Venter.
No new subscription agreements will be entered into for the service and on 31 October all Altech Node services will be officially terminated.
The Altech Node set-top box was unveiled in September last year and described as a fully-converged home "gateway" console. The device was Altech's attempt to break into the VOD market, but offered a smart home solution in addition to incorporating smart TV and smart entertainment functionality.
However, the uptake of the product did not meet expectations and the company announced in July that it was in negotiations to sell the Node business. This seems to have been a harder task than anticipated with Altron now admitting that closing the business is the only option.
Altron has now committed to refunding all current subscribers with an amount of R1 999 per Altech Node device. At launch a year ago the console retailed for R3 499 with customers paying a monthly subscription fee of R299.
Unfair competition
Independent broadcast analyst Kate Skinner says she is not surprised the Node failed because it was trying to play on a playing field that is not friendly to newcomers.
"One of the big problems is that the market in South Africa isn't particularly competitive to launch new products into because the big players have such a strong hold.
"The Node's failure points to the fact that we need the regulator to play a stronger role to ensure that newcomers have a chance of survival," according to Skinner.
Altron blames the failure on low uptake in what it calls a "highly competitive market space", while the general consensus in the market was that the device was too complicated and too advanced for the average user.
"We overestimated the readiness of the South African market for such a pioneering service, combining both VOD and smart home services," says Altron.
Venter says he still believes the technology in the Altech Node "is highly innovative and world class" and this technology will continue to be owned by Altron.
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