This year more than 40 million connect TVs are expected to ship, according to a new report for display market researcher DisplaySearch.
While impressive, that number will seem small in comparison to the more than 118 million connected TVs to be shipped in 2014, according to the firm's newly released "Quarterly TV Design and Feature Report" for the third quarter of 2010.
The report finds that at the same time TV set manufacturers are ramping up connected TV deliveries, broadcasters are launching new standards and portals, such as Hbb.TV and YouView, to address this growing segment.
"It's an exciting time for the connected TV sector," says DisplaySearch director of European TV research Paul Gray. "It's a battleground where TV set makers, Internet video companies, free-to-air broadcasters, pay TV and the IT industry are all rushing to stake their claims. IPTV is moving from being a technology to becoming recognizable service offerings."
While connected TV shipments are ascending, there are challenges. According to Gray, set makers will have to acquire new skills such as negotiating content deals to succeed. "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," he says.
DisplaySearch also foresees a bifurcated connected TV landscape in the future in which basic connected sets offer enhanced services, such as VuDu, and smart TVs give viewers features equivalent to smart phones, such as configurable apps, access to search engines and advanced user interfaces.
DisplaySearch further defines a smart TV as one that can retrieve content from beyond the walled garden of an IPTV network, has intelligent search and recommendation, can be upgraded by its owner, and is able to network seamlessly with other devices in the home.