Research: Connected TV will be consumers' portal to the Web by 2015

editor's corner

Jim O'NeilCall it the "rise of over-the-top delivery," or "increasing consumer demand," or the "Netflix effect." Consumer electronics companies are simply calling the increasing popularity of Internet-ready devices "an opportunity."

New research from IHS iSuppli forecasts that more connected devices will ship than devices traditionally used to connect to the Internet, like PCs, by 2013, leading to consumers eventually being more likely to access the Web through a connected TV set than on a PC.

The research predicts that shipments of devices like televisions, video game consoles and Blu-ray players will exceed 503.6 million units in 2013, more than three times as many as shipped in 2010. PC shipments, the firm said, will amount to 253.3 million, up from 222.3 million, during the same period.

And, IHS said, shipments of Internet-ready devices in 2015 will hit 780.8 million units, far more than the 479.1 million personal computers.

"These new figures are the latest evidence that the Internet is not just for PCs anymore," said Jordan Selburn, principal analyst for consumer platforms at IHS. Selburn said the Internet has revolutionized the CE business by delivering a range of products that can bring Web-based content to homes.

"Increasingly, each Internet-enabled consumer electronics device is vying to become the center of what is known as the digital living room, aggregating content throughout the home and serving up movies, television programs, videos and music," Selburn said. "In the future, consumers will be more likely to access the Internet through their televisions than via their PCs."

IHS predicted tablets, specifically Apple's iPad, also would see spectacular growth. The 50 percent rise in the shipments of Internet-enabled consumer electronics devices will be led by the media tablet, projected to become the fastest-growing segment within the space with some 300 million units shipping by 2015, a CAGR of 73.3 percent.

Game consoles were last year's leading connected device, in terms of shipments, with 50.5 million units sold. Televisions were next with 40 million. IHS said tablets would grab the lead this year, with projected shipments of 61.9 million, up 214 percent.

Aside from the media tablet, other Internet-enabled devices that will grow rapidly in the years to come include Blu-ray players and set-top boxes, IHS reported, projecting Blu-ray players would have a CAGR of 37.9 percent.

And, despite discussions to the contrary, STBs appear to be here to stay because they offer features that can't be duplicated by other systems--obtaining content from multiple sources like video on demand or "catch up" television, in addition to the content already available from cable or satellite providers. IHS said that makes the device a long-term, high-value fixture.

The Diffusion Group recently reported that 20.5 million North American households already have Internet-ready TVs and that 72 percent of new U.S. TV buyers were leaning toward purchasing smart TVs. Research firm DisplaySearch, meanwhile, said 138 million units, about half of all TVs shipped, will be Internet ready in 2015.

Regardless of the driver for the increasing popularity of connected devices, one thing's for sure: online video will be a major beneficiary.--Jim