Abstract

Branded Vendors Test Market Acceptance with New Smart TVs

The worldwide TV market is facing the situation of demand saturation and product innovation bottlenecks due to high market maturity. To boost sales, branded vendors have been rolling out TV products featuring large screen, LED, 3D and internet access to create product differentiation and prevent ASP to decline further. Smart TVs have been a major product for vendors in recent years.

Branded vendors have been seeking to profit from content and service providers' new business models by offering them a content or application transaction or matching platform. Since the emergence of smart mobile devices, which gave rise to smart TVs, human-machine interfaces including voice and hand gesture controls, face recognition, touch screen, keyboard, and motion sensing has become a key feature for smart TVs. However, the optimized interface is yet to come due to ongoing developments of applications and usage scenarios. Besides, consumers' price sensitivity has reduced market acceptance for smart TVs that have been positioned as high-end products with innovative technologies.

The market growth potential and diversified product developments have attracted worldwide TV brands to jump on the bandwagon in 2012. The smart TV developments have focused on platforms incorporating various functions such as audiovisual entertainment, web browsing and searching, social networking, Skype services, and app downloading. Games and applications for sports and educational purposes have also been added. Multi-screen support and cloud storage is another key development. By allowing for ad-hoc connection between smart TVs and other smart devices via wireless networks, users can access, transmit, and share data from their smart devices via wireless networks.

Branded vendors have taken advantages of their market share (such as Samsung, LG), channels (Wal-Mart, BestBuy), cross-industry cooperation (Lenovo), and content resources (Sony) to roll out smart TVs or peripheral products to test market acceptance. With Google and Apple jumping in, existing TV vendors have started to explore possible business and usage modes for smart TVs based on Google TV platforms.

In emerging markets, considerable replacement demands due to analog-to-digital conversion from 2012 to 2014 and burgeoning broadband network services will drive smart TV growth. In mature markets, the growth momentum will come from broadcasters' network service integration effort or the emergence of streaming services, which is expected to spur replacement or second-TV purchase demands. As a result, most branded vendors have positioned their network TVs or smart TVs as high-end and mid-range products.?

Integration to be Key for Future Smart TV Developments

The similarities between branded vendors' smart TVs in 2012 include app stores, applications of web and audiovisual content search, integration and data sharing with tablet PCs or Smartphones, and social networking services. However, due to the wide range of functions, vendors must solve the problem of operational difficulties first. Therefore, human-machine interface has become the industry's priority in recent years, which has focused on the integration of keyboard, voice control, hand gestures, body movements, and even eye contact. In other words, whether a smart TV is smart enough will depend on the how well a human machine interface is designed.?

The blooming of smart TVs has led to a proliferation of platforms, from vendors' own-branded versions to Google TV and other customized Android platforms, as well as all kinds of applications, causing great confusion for consumers and apps designers, and hindering product developments. The formation of the Smart TV Alliance will facilitate smart TV platform integration, helping software, hardware, and service providers develop applications compatible with different vendors' platforms, while guiding developers towards the alliance's open-sourcing systems. The establishment of China's Smart Cloud TV Industry Standard is a practical achievement of the alliance. Disregard the accuracy of the standard and the hidden political conflicts, the standard does contribute to product and technology integration, and encourage vendors in the supply chain to engage zealously. It is thus fair to say Smart TVs have come to a critical point in its development.

Human-machine interface is heading towards technological integration, too. As viewers enjoy leaning back when watching TV, the operation mode should be as simple as possible. Therefore, the integrated applications and human-machine interface must fit in with the traditional lean-back TV viewing experiences. Since single technology will not be able to address varied smart TV usage scenarios, a human-machine interface incorporating voice and hand controls will be a common operating mode to provide perfect interactions between users and applications.

While human-machine interface design becomes more comprehensive with embedded sensors and integrated computing resources, branded smart TV vendors are advised to open-source their resources to TV app developers, so that they can fully capitalize the processors and sensors when creating innovative applications. This will help construct an ecosystem featuring mutually beneficial relationships between hardware, software, and application suppliers.

Appendix

Glossary of Terms

List of Companies