Europe Economy

'Smart' TV War: First Salvos at Europe Tech Show

Antonia van de Velde and Ed Hunton,

If 2010 was the year of 3D viewing, "smart" TV looks set to dominate 2011.

Visitors are reflected in glossy TV screens at Sony's booth at the 50th edition of "IFA" in Berlin at the 50th edition of "IFA" in Berlin, September 7, 2010. IFA, the world's largest consumer electronics and home appliances fair opens to the public from September 3 to 8, 2010. AFP PHOTO / ODD ANDERSEN (Photo credit should read ODD ANDERSEN/AFP/Getty Images)

With consumers increasingly turning to the web for entertainment, televisions which allow users to download shows off the Internet will be vying for attention at the IFA technology fair in Berlin this week as technology companies make a push into a potentially huge market.

Consumer electronics manufacturers have been slow to respond as Apple — likely to be one of the main topics of conversation at the IFA fair despite its conspicuous absence — has encroached into their traditional territory: the living room.

The success of iTunes and the App store as well as Apple TV have helped to take Apple into the heart of the domestic setting.

The company’s "lifestyle brand" status is the envy of device manufacturers the world over.

But tech giants such as Samsung and Sony are attempting to claw back market share, with each introducing app stores that mirror Apple’s tried and tested model.

They will be also be keen to showcase features they have introduced to their devices that are usually associated with computers: social networking, e-mail, payment mechanisms and video on demand services.

Korean tech giant LG unveiled a new range of its smart TVs at IFA on Wednesday ahead of the start of the event, which opens to the public on Friday and runs until September 7.

The move could will help LG chip away at Samsung’s dominance in this space.

The company will also show off a new mouse which also acts as a scanner, just one of many treats which IFA will serve up for gadget fans.

German industry association gfu, which organizes the fair, is expecting growth of four percent for the consumer electronics market in 2011 to a total of approximately 27 billion euros ($38.6 billion) despite weak economic growth which has eaten into consumers’ budgets.

“Without any major events such as the Olympics or soccer World Cup the first half of 2011 was relatively quiet on the consumer electronics market, making IFA particularly important. This event will stimulate demand on the markets at the start of an important sales season,” Hans-Joachim Kamp, Chairman of the gfu Supervisory Board said in a statement ahead of the event.

Tablet Battles

Tablets, smartphones will also dominate the 2011 edition of the world’s largest technology fair.

Ever thinner tablets are expected to be unveiled by the likes ofLenovo and Toshiba. Sony  revealed more details about its tablets ahead of the start of the event on Wednesday. The price has caused concern among analysts however.

"The issue right now that raises up a huge red flag is the tablet from Sony is priced almost identical to Apple’s pricing for their two models. That raises a very big question: would a person want to get a Sony tablet instead of an Apple (one)?," Mark Koh, analyst at Frost & Sullivan told CNBC.

Industry insiders point to the potential growth in tablets and smart phones being used as “companion” devices in conjunction with the family TV, an approach that could add personalization for the individual without changing the main TV experience.

On Thursday, Samsung unveiled its Samsung Galaxy Tab 7.7, promising faster speeds and athinner and lighter design which the company says does not compromise on battery life. It also launched the Galaxy Note handset, with a 5.3 inch display, the largest screen size among smartphones.

Demand for tablet PCs in Europe is growing fast, a report by research firm Forrester showed. Forrester expects the European tablet market to constitute 30 percent of worldwide consumer tablet sales in 2011.

“Between 2 percent and 7 percent of online Europeans in the countries we surveyed self-report owning a tablet, and an additional 10 percent to 14 percent say they’re interested in purchasing a tablet,” Forrester analyst Sarah Rotman Epps said in the report.

Organizers have had to build additional exhibition halls this year and exhibitors including Samsung, Philips, Toshiba and Acer will be spread across 28 halls where they will showcase their latest gadgets.

And although the European market has more room for Apple competitors than the US does, no tablet competitor has come close to Apple’s market share and the non-iPad tablet market is extremely fragmented, Forrester’s research showed.

"It’s too early to concede this market to Apple," Koh said.

No wonder the world’s technology giants will flock to Berlin to do battle with the absent Silicon Valley legend.