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Originally featured on BroadcastEngineering.com
Nov 8

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11/8/2010 12:44 PM  RssIcon

While most marketing efforts have focused on 3-D TV, Internet TV has progressed quietly but steadily.

Nearly a year ago, at the CES trade show in Las Vegas, the “next big thing” was said to be 3-D TV. Now, new research shows that another technology has usurped 3-D’s thunder in “a quiet revolution” that is stealing sales from the nascent technology.

More than 40 million Internet-connected TV sets will be shipped worldwide in 2010, with the number growing to 118 million by 2014, according to market research firm DisplaySearch. 3-D TV sales, on the other hand, will equal only 3.2 million sets sold worldwide this year. That means 3-D TV sales will end the year with only 2 percent of all flat-panel TV shipments.

The hotter technology in 2010 has been Internet-connected TV, which will split between more basic connected units and so-called “smart TVs” that will have configurable apps, sophisticated search and navigation engines and advance user interfaces.

While most marketing efforts have focused on 3-D TV, Internet TV has taken off quietly and will likely heat up the competition between multichannel programmers such as cable and satellite vendors against Internet providers of video programming.

“It’s an exciting time for the connected TV sector,” said Paul Gray, DisplaySearch’s director of European TV research. “It’s a battleground where TV set makers, Internet video companies, free-to-air broadcasts, pay-TV and the IT industry are all rushing to stake their claim … I think most of the TV supply chain senses that this is a seismic shift in the usage of TV that will be far more significant than 3-D, which will not alter TV function or usage patterns.”

On the negative side, DisplaySearch analysts cautioned that consumers around the world remain confused about the technology. A recent DisplaySearch report found that only 10 percent of the connected TVs sold in Japan have actually been hooked up to a network.

“It has been a long, challenging journey so far, especially with new competitors like Google TV joining the battle,” Gray said. “Set makers will have to acquire new skills such as negotiating content deals in order to succeed.”

A limit on 3-D sales has been the need for glasses for each home viewer. Prospective buyers have said in survey after survey that the use of glasses is a negative in the home 3-D experience.

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