Smart, Internet-connected television sets will account for 85% of TV sales within the next few years, according to analyst firm Gartner, which predicts in a new research report that worldwide unit production of flat-panel smart TVs will grow from 69m in 2012 to 198m in 2016.
Worldwide unit production of smart TVs in 2013 is expected to reach 108m.
However, analysts said that smart TVs alone won’t spur demand in the market. TV manufacturers must recognise the need to offer some compelling reasons for consumers to choose their brand over a competitor’s, Gartner says.
“In the end, the choice may be all about the extra content that one TV brand offers over another,” says principal analyst Paul O’Donovan. “Consumers will be asking questions such as, which Internet TV services can the TV access? Are these the sites I think are valuable? Can I use my smartphone or tablet with this TV?
“It is critical for the TV industry during this global economic downturn and decline in consumer confidence levels, to sustain sales and maintain or grow market share — especially in emerging markets. This is difficult when demand has slowed, so the extra functionality offered by smart TVs becomes the product differentiator — if prices are already competitive and all other variables are equal between brands.”
Gartner defines a smart TV as having the ability to search the Internet for video content and then play that content back. It may or may not include a browser, but there is the functionality to add applications from an app store operated either by the TV manufacturer or by a third party.
Internet-connected smart TVs will be able to access a wide variety of content from the Internet over a broadband connection, and will receive traditional TV broadcasts via terrestrial transmissions or via satellite, cable or an Internet protocol TV set-top box. They will still be connected in this way because pay-TV services will continue to carry much of the premium TV content — such as sports and events — that will not be readily available over the Internet.
However, it is the connection to the home broadband that makes a smart TV different. Today’s smart TVs can access video content on the Web in many ways and can run some applications commonly found on devices such as smartphones or tablets.
The TV market is evolving, with the TV becoming the central component bringing together the multiple screens now present in the home, according to Gartner. The smart TV offers consumers greater access to a wide range of content in the living room that has, until recently, only been available on PCs, smartphones and tablets.
“With connectivity to smartphones and tablets comes the ability to pull content from the Internet on one device and push that content to the TV. For those TV manufacturers that also make smartphones and tablets, the marketing advantage of the smart TV makes educating the consumer a lot easier,” says O’Donovan.
