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Connected TVs to dominate OTT hardware landscape by 2016, says IMS Research

Connected TVs will one day dominate the OTT video hardware landscape despite the availability of an increasing variety of TV-related devices, such as game consoles and Blu-ray Disc players, that offer a gateway to the Internet, according to a new report from IMS Research.

The report, "Over-the-Top Video — Hardware and Connectivity — 2011 Edition," projects dramatic growth in shipments of connected TVs over the new five years. IMS Research forecasts that in 2016 yearly shipments of connect TVs will reach 180 million units around the world. It also pegs 2015 as the year annual connected TV shipments will overtake shipments of all other consumer OTT devices.

"Pay-TV operators, application developers, content providers and OTT service providers such as Netflix should all strategically be planning for a future where the most common OTT video device is the television," says Paul Erickson, senior analyst at IMS Research.

IMS Research sees the number of connected TVs growing whether or not consumers specifically seek out OTT capabilities due to Internet connectivity becoming a standard feature in progressively more affordable TVs.

"As broadband penetration increases worldwide and OTT functionality becomes commonplace in all but the lowest-end TVs within the next two years, it sets the stage for connected TVs to be the most globally significant OTT video device over time," Erickson says.

This year, IMS Research expects to see connected TVs achieve a significant milestone in the home electronics arena by surpassing the number of HD game consoles in use. Fast growth in the installed base of connected TVs as well as growing awareness among consumers about the availability of OTT functionality will propel connected TVs past game consoles in OTT usage within five years, according to the research firm.