The Smart TV Surge

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More than half the TVs shipped internationally in Q1 2016 were smart TVs. Is India ready to follow these global digital footsteps

An important milestone was passed in early 2016: more than half of the TV sets shipped globally in its first quarter were smart TVs. The acceleration in the uptake of internet-connected TVs was led by China, where four out of five TV sets shipped with smart functionality. 56% of North American TV shipments were smart TVs, according to IHS Inc, a global source of critical information and insight.

“It is a remarkable result,” said Paul Gray, principal analyst for IHS Technology. “China and North America continue to experience growth in the share of smart TVs, and the feature is now established in entry-level products.”

To give some context to these numbers, worldwide shipments of smart TVs in the fourth quarter of 2015 reached 48.5% of all TV sets shipped in that quarter. In all, 34.2 million smart TVs were shipped in 2015’s fourth quarter, contributing to shipments breaking the 100 million mark for the first time in 2015, according to IHS Inc. By contrast, shipments stagnated in Europe and Japan in recent quarters. In Japan, only 38% of sets shipped with the feature, the lowest result recorded since 2011. European shipments remained stable at 40% to 45% level for the past two years.

The good news though is that smart TV shipments are expected to rise up to 134 million by 2020. “It is all about content,” said Gray, “where the local offering is relatively weak, consumers are reluctant to pay extra for built-in internet TV services. Good streaming content in local languages remains the key to value in smart TV.”

ANDROID RULES ON TV TOO
The Android operating system now accounts for almost half of smart TVs shipping in the first quarter of 2016. However, when examined more closely, Tizen leads all other regions and accounts for 43% of smart TVs shipped outside China.
“Android in various forms has been wholeheartedly adopted by Chinese brands,” Gray said. “The first quarter of this year was exceptional, with seasonally strong sales in China, but weak sales elsewhere, and it is clear the Android-based solutions have a global lead.”

North America has an additional smart TV platform option, Roku. For Chinese brands, the addition of the Roku TV capability to TVs significantly bolsters product value. In fact, Chinese brands are typically shipping around 10% to 20% of products with smart featuring in Europe, whereas Roku partners in North America ship over 90% with the feature.

“Smart TV is becoming a critical factor in Chinese brands’ export development,” Gray said. “Roku TVs in North America have proven a powerful way for aggressive brands to build share with consumers confident of the value of their purchases.”
He added that smart TV will continue to grow at a more gradual rate, pointing out that China, the dominant engine of smart TV growth, has little extra room to grow. “Other developed markets are increasingly saturated, while lack of broadband internet connections remains an issue in emerging regions,” he noted – a problem that afflicts India too.

THE SMART CHOICE, TRULY?
According to Strategy Analytics, while the popularity of over-the-top (OTT) and video on demand has influenced the increase of connected media devices in consumers’ homes, a smart TV is not the go-to connected media device for several consumers. The research agency stated that these days, consumers are not just relying on one connected media device per household, but rather, are turning to multiple devices due to costs, ease of use, user interface (UI) and navigation, compatibility with other ecosystems and the apps/services/features available.

Taryn Tulay, senior analyst at Strategy Analytics said, “The ‘clunky’ interface of the smart TV has long been a pain point for many owners, with many finding that the UI of other connected media devices they own surpasses that of the smart TV in terms of ease of use, and speed of navigation and responsiveness. With the competition providing the same embedded apps/services as a smart TV, it is imperative that smart TVs not only offer more value-added features, but also a better overall consumer experience in terms of a more simplified and faster UI, easier navigation, an intuitive and more fluid remote and HMI interaction, more customization options and quality applications/services that complement the TV experience.”
Diane O’Neill, director-user experience, innovation practice at Strategy Analytics added, “Compatibility with all smartphones, tablet and laptop ecosystems is also imperative; mirroring content via such devices should be effortless. Combined, all these aspects can only work to improve the media experience and value of a smart TV.”

THE INDIAN SCENARIO
Closer home, according to 6Wresearch, the Indian smart TV market is expected to reach $10.41 billion by 2017, growing at a CAGR of 87.02% during the period 2012-2017. Players like LG Electronics, Sony India, Micromax, Samsung, etc, are already present in this domain, but in recent times they have started upping the ante by introducing new models to encourage customers to shift to smart Tvs.

A month ago, Samsung launched a line-up of 44 new TVs in the country, comprising SUHD TV range in the premium segment, Smart TV range in the mid segment and Joy Beat range in the affordable segment. The new SUHD TVs with ‘Quantum Dot’ display offer Quantum Dot Colour and HDR 1000 features that claim to deliver great colour reproduction, brightness, contrast, and picture details.

The SUHD TV range will be available in the sizes 49-inch to 88-inch screen sizes in the price range from INR 1,79,900 to INR 23,99,900. The Smart TV range with Smart Interface, Smart Content, Smart Convergence and Smart Play will be available in 32-inch to 78-inch screen sizes in the price range of INR 34,500 to INR 7,03,900.

California-based Vu Technologies, too, introduced its range of four Smart TV range in May 2016, which are exclusively available on Flipkart. The prices start from INR 20,000 for the 32-inch HD Smart TV and rise to INR 52,000 for the 55-inch FullHD Smart TV. Rumours are also rife that Reliance Retail is likely to launch UHD smart TVs to support Reliance Jio Infocomm’s rollout, though no official confirmation is forthcoming.

Skyworth India Electronics also unveiled the Air TV in India recently. The 55G7200 series, priced at INR 1,69,990, designed by a Red dot award winning team based on the Art technology, is 7.9 mm thin, sports a 55-inch screen and features 4K UHD. Its 5-in-1 digital video broadcasting technology (DVB-C, DVB-T/T2, DVB-S/S2) is powered with a personal video recorder option that gives viewers the choice of recording content broadcasted on various channels. Jackson Zhang, MD, Skyworth India Electronics believes that such products will wtiness great success in the country, as Indian consumers are appreciative of high technology and quality.

While more consumers are willing to consider smart TVs, especially whilst opting for their next TV purchase, many are weighing the price value proposition it offers before making a decision. They also want these TVs to have simpler interfaces, onscreen menus and accompanying devices to enjoy a pleasurable viewing experience. Till that comes to pass, it is unlikely that smart TVs will be able to dominate the TV market at least in the immediate future.

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