A quick look at Informa Telecoms & Media’s latest smart TV device forecasts would leave no doubt that smart TVs are coming.
Indeed in 2017 221 million smart TVs are expected to be sold an increase of over 400% from 2012. And by the end of 2017 there will be over 800 million smart TV sets will be in homes worldwide. 31% of households worldwide will own a smart TV, with household penetration much higher in North America (63%) and Western Europe (64%).
But the reality behind these numbers is considerably less spectacular. Any smart TV bought in 2012 would have been obsolete for a minimum of 2 years by 2017. And whilst connection rates are rising for smart TVs they will continue to lag connection rates of games consoles and media streaming devices – Apple TV, Roku, etc – even in 2017. So many of the 800 million smart TVs in homes in 2017 will be used in a broadly similar way to how dumb TVs are used today.
Smartphones set a pace TVs can’t match
With their long lifecycles TVs are simply not device to try and make the center of the digital home.
Instead devices that are regularly replaced including smartphones, tablets, set-top boxes, media streamers and games consoles that will be key devices in the digital home experience.
Of these, smartphones will continue to define what smart truly is - due to short lifecycles and rapidly increasing processor power, users will rarely own a smart phone for longer than 3 years.
At best a smart TV bought in 2011 or 2012 will be used for streaming OTT video services for a few years. But they lack the processing power and the requisite hardware to perform truly smart TV functions that will be standard in 2015.
It is not just Moore’s law that will hasten smart TVs transition to the status of dumb screens. Manufacturer’s short term vision for their smart TV products will also hinder the device. Examples abound of services launched solely on this year’s smart TV models.
Users who bought last year’s device are left out because of faulty reasoning which believes not having this year’s must have smart TV app – HBO Go, Lovefilm, Netflix, BBC’s Sport – will be enough to drive them to buy a new TV.
Fragmentation continues to hold back smart TVs
Unlike smartphones fragmentation of platforms and standards continue to plague smart TVs. Apps cannot be easily released across multiple devices simply, but each smart TV platform demands bespoke development.
This situation is currently benefitting market leaders Samsung and LG who can attract top services first due to their strong positions. And whilst Informa believes that Google TV or Android will come to be the default OS for smart TVs that is still some years away.
If Apple has lost some of its early impetus in smartphones to Samsung, it will find the Korean company even harder to compete with in the living room where it by some way the market leader for innovation.
Smart TVs won’t kill the STB, just the opposite
When smart TVs first launched commentators suggested they could spell the end of the set-top box (STB). But this looks more unlikely to happen with each year. There may for a few years where owning a smart TV removes the need for a STB, but after this users will look to upgrade to gain access to all the latest features with a new STB.
However this device may not be a tradition STB but rather a games console or media streamer. It is these devices and some of the advanced STBs from Pay-TV providers that will drive change how users consume TV. And it is for this reason that Apple and Microsoft could establish themselves as significant players in the North American TV market.
Interactivity is the key to true smartness
If TVs are going to be truly smart they must do more than offer a wide variety of OTT video services. Instead they must add advanced functionality including voice control, motion control, advanced advertising, attractive user interfaces and two way communications with those smart devices – so called second screens – allowing these devices both to send video to the TV and know what is being watched. Not that either of these by themselves is enough rather all of these and more are required, and manufacturers should stop focusing on adding more content but should improve how users can interact with that content.
Andrew Ladbrook is a senior analyst for broadband and TV at Informa Telecoms and Media. For more information, visit www.informatandm.com/