3.1 billion consumer video devices to be sold by 2017, forecast predicts

More than 1 billion consumer video devices were shipped last year, a figure that will nearly triple by 2017, according to a new analysis from Frost & Sullivan.

According to the research firm’s “Analysis of the Consumer Video Devices Market” 1.2 billion units worth more than $360 billion were shipped in 2012. Unit sales are expected to climb to 3.1 billion devices by 2017.

"Consumer appetite for online and personalized content, including both on-demand and live TV, anytime and on multiple screens simultaneously, is going to remain the number one driver of the consumer video devices market," said Frost & Sullivan Digital Media Industry Manager Avni Rambhia.

"Internet video disrupted the pay-TV industry once,” said Rambhia. “Today, a wide range of consumer video devices, including Blu-ray players, gaming consoles, IP-connected devices, set-top boxes, smartphones, and smart TVs, are forcing a remolding of business models across the board."

Smartphones account for nearly half of total market units currently and will continue to spur market expansion, according to the analysis. The rapid adoption of tablets and smart TVs and sustained sales of set-top boxes, including home gateways, will also contribute significantly to overall growth.

According to Frost & Sullivan, the competition to innovate and differentiate, while still lowering prices, is stressing the market in terms of risk and return on investment.

"Price does matter to the large majority of consumers, but features and innovation determine early market success," said Rambhia. "Thus, a strategy that straddles both price and feature sets is most likely to succeed in the long term."

To win market share, the analysis finds that forming partnerships with content service providers, game developers and app developers to ensure a total package that will appeal to consumers is key.

"From a service provider perspective, a personalized, convenient, and intuitive user experience is critical to achieving service popularity," said Rambhia. "Vendors who craft compelling services that are consistently available across all major devices will find that users are willing to pay (directly and through ad viewing) for such experiences."