The head of Bradford University's school of management today said digital set box company Pace is a victim of a specialised market.

Arthur Francis, Dean of the Bradford University School of Management, said it wasn't the management's fault that the company - which makes set-top boxes for cable and digital TV companies - had faltered.

Yesterday, the Telegraph & Argus revealed how the Saltaire-based company was laying off a fifth of its workforce to try to stem losses at a time when its turnover was shrinking and its profits plummeting.

The company announced to the Stock Exchange that it was going to cut up to 180 jobs as its pre-tax profits for the year ending June 1 dropped to £13.1 million.

After exceptional items - including writing down the value of a US telecoms company it owned - the company made a pre-tax loss of £29.5 million.

But Mr Francis said the business was in a tough position after the collapse of ITV Digital and problems over supplying set-top boxes to cable company NTL.

"It's not a case of them being incompetently managed or making the wrong decisions with technological developments," he said.

"And there's nothing wrong with the product itself, it's just that they're in a risky business that's very tough to be in and are suffering the consequences.

"They're in a very vulnerable position because they've got a very specialised product and are terribly reliant on their customers."

And he said the much-vaunted switch to digital TV - which had yet to take-off - had also hit the Victoria Road firm hard.

"The switch to Digital TV is much slower than everyone had hoped so demand for the product is lower than they'd hoped and they're getting squeezed on the price they get for it by their customers," he said.

"Of course a takeover is a possibility but I wouldn't have thought it was a particularly attractive takeover prospect and the problems it's facing aren't ones that are going to be solved by bringing in new management.''

Mr Francis added that the fact that the consortium led by the BBC and BSkyB had just been awarded a Digital TV license following the failure of ITV Digital was a ''small ray of sunshine'' which would help stimulate demand for Pace's set-top boxes.