The viewing landscape is changing, with TVs getting bigger and computing devices getting smaller. Jim Bottoms of Futuresource reports on these developments, as well as the shift in control over content distribution.
After a decade of growth driven by the transition from analogue CRT to digital flat panel TV, the consumer electronics industry is now moving into a new era of competition where multi-screen capability, internet connectivity, applications, and 3D are powering the next phase of growth.Additional complementary innovations are also percolating through, which include wand remote controls, voice and gesture recognition, lower energy consumption, OLED and ultra-high definition offerings.
Samsung is looking to replicate the huge success it has had in smartphones with applications and content for Smart TV, as well as rolling out tablets and driving up its share in conventional PCs; Sony has been driving Bravia Internet and plans to create a “new type of television” driven by content partnerships and synergy with PS3; while other major TV brands have been actively developing their Smart TV propositions, but in some cases may have less potential multi-platform leverage.
In tandem with all the activity from the CE manufacturers, the content industry is focusing on multi-platform strategies, and is learning how to manage digital distribution. Not least in respect to Smart TV, which potentially could challenge the conventional order that has governed broadcast and cable programming distribution for the last 60 years.
This convergent multi-platform marketplace presents both opportunities and challenges to the companies that lead the TV market, but is also attracting powerful new players from the digital world like Google and Apple, not least as Smart TV opens the door to interactive applications across social media, gaming, advertising and e-Commerce.
Futuresource research shows that, once final figures are in, the global flat panel TV market is likely to have reached 224 million units last year, an increase of 6% from 2010. Strong growth has been experienced by emerging regions including China, India and Brazil, but this is being offset by declines in Western Europe, Japan and the USA, as these territories head towards saturation point. Of the 224 million units, 27% will be Smart TVs, rising to more than 80% of the total units shipped in 2015.
On a regional level, Japan leads the way in the adoption of connected TVs, with 59% of shipments in 2011 providing IP connectivity as standard. Penetration in the USA and China was around 29%, with Europe behind the curve at 24%.
Market development will be primarily driven by LED TV shipments, accounting for 90% of units to be shipped globally by 2015. Other technologies including LCD, PDP and CRT are expected to decline throughout the forecast period, while OLED – currently used in smartphone technology – will gain traction in TV development by 2015. Market leaders Samsung and LG are already showcasing this technology.
As demand for connected TVs gains momentum, major TV manufacturers are responding by making IP connectivity a standard feature in 60% to 80% of their product portfolio. In addition, embedded Wi-Fi is expected to drive usage and many premium models now incorporate this feature, enabling consumers to connect and use with ease (often, a wired internet connection is not only on a different wall to the main television, but on many occasions within a different room).
Looking to 3D technologies, increased product availability and falling price premiums have contributed to the growth in global shipments, which are expected to exceed 16 million units for 2011 once final numbers are in. Over the next three to five years, there will be significant movements in the growth of 3D-capable households as 3D becomes a standard feature in the majority of mid to high range TVs, in the same way as high definition is today in large screen sized sets, with anticipated growth throughout the forecast period, accounting for 50% of shipments in 2015.
One of the key reasons behind the growth of 3DTV is that consumers are purchasing the 3D function by default when looking to upgrade to higher-end models, mainly as they are unaware of the in-built 3D capability at the time of purchase. Additionally, over the last 12 months the industry has seen hardware prices decline sharply, with 3D BD players dropping by half and a wider range of 3D TVs available under $500, thus broadening market appeal.
With significant worldwide developments in the installation of HD set-top boxes enabling a quick roll-out of 3D channels, viewing quality and content has dramatically improved. The last 12 months have seen a rise in available 3D channels around the world from 50 to 90, with a further 15 to 20 expected to emerge in 2012. Interest in the London Olympic Games in 2012 is fuelling this, with a significant number of broadcasters looking to secure, or having already secured, 3D broadcasting rights. Broadcasters are typically maximising the potential of 3D by defining it as a unique selling point for high-end subscriptions to gain competitive advantage and reduce consumer churn.
And while the trend in TV is towards ever- larger screens and the home theatre experience, the world of computing is trending to smaller personal infotainment devices, through the continued rise of tablets and smartphones. However, convergence is actually being driven by connectivity, interactive applications, digital content and the common use of enabling technologies, not predominantly through physical form factor. Networked TV sets can display output from personal digital devices, but a high volume consumer market is likely to continue to thrive for dedicated computer monitors for a number of years to come.
