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Report: Internet-connected TV sales to surpass game console sales

Thu, 06/30/2011 - 8:20am
Mike Robuck

A new report from Informa Telecoms & Media predicted that the worldwide sales of Internet-connected TVs this year would outstrip game consoles for the first time.

Microsoft, Sony and Nintendo are slated to sell 37 million game consoles this year, but consumers will buy 52 million connected TVs from companies such as Samsung, Sony and LG.

"The market for connected devices – connected TVs, connected Blu-ray players, games consoles, media-streaming devices and hybrid set-top boxes – is continuing to grow globally as consumers seek to access services such as Netflix and iPlayer via their televisions," said Andrew Ladbrook, analyst at Informa Telecoms & Media. "In 2016, 1.8 billion in-home video devices – including tablets – will be sold, an increase of almost 800 percent from today. And by this time, 70 percent of all in-home video devices sold will be able to connect to the Internet.

"Until now, many online video services were launched primarily with the game console in mind, mainly because console users innately understand how to connect these devices and demand interactive video services from them. However, this is beginning to change as connected TVs bring these services to a mainstream."

The report said the largest consumer electronics manufacturers stood to make the biggest gains, in particular the big three: Samsung, LG and Sony. But TV manufacturers will be faced with a conflict of interest. On the one hand, they must build and support a platform that works across both the latest and legacy devices, effectively reducing the differences between the two – and, on the other, they must persuade users that the latest iteration is a superior device and worth purchasing.

But Sony, Samsung and LG will face market pressure from emerging companies.

"Just as Sony was toppled by the emergence of Samsung and LG, so these established companies should be wary of Chinese manufacturers such as Hisense and TCL. These manufacturers are following the high-volume, low-price model laid down by Samsung and are likely to be the biggest beneficiaries of connected TVs as the Chinese market burgeons to sales of over 47 million in 2016," said Ladbrook.

The report said the main losers would be media-streaming devices, which Informa does not believe will move far beyond the niche status they currently occupy. This could have major implications for players that have launched standalone boxes, including Apple. Informa believes that in order for Apple to be a player within the connected home space, it must launch a TV, or at least turn its Apple TV device into something more than a convenient way to access video via iTunes.

Connected TVs are a mixed bag for cable operators since they provide streaming video content that competes with MSOs' offerings. Earlier this year, Comcast CTO Tony Werner said in CED's CTO Roundtable that the success of Internet-connected TVs was more of a function of the available content rather than the technology, which Comcast was addressing through its online Xfinity offerings to its subscribers.

In the same story, Balan Nair, CTO of Liberty Global, said connected TVs would need to have interfaces that allowed users to access the content they want with more ease and relevance.

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