Apple's Rivals Fight the Giant With Connected TV

Consumer electronics (CE) companies, from traditionally low-end LG to high-end Panasonic, are presenting connectivity as the new must-have experience in the living room.


In a move that appears to mirror Apple's I-Mac/I-Life/I-TV philosophy – which builds a lifestyle around a set of products - CE companies are promoting their products as a way to improve your digital life.

More choice without more complications, as Youghee Lee, Samsungs VP of Global Mobile Communications Business, puts it.

A major component of this approach is the connected "smart" TV, which is a television with network connectivity that offers access to a range of services beyond linear broadcast.

Implementation of this "connected" philosophy is also closely aligned to Apple's model.

TV apps are a hot topic and they have many evangelists at IFA, the technology fair in Berlin which runs from Sept 2-7.

Currently, most app galleries include popular services like Facebook, Picasa, BBC i-player and Netflix.

CE manufacturers have also developed proprietary app stores, and while it has taken time to make money out of them, there are signs that the tide is changing.

But as global growth slows in the third quarter and inflation rises, will families in Europe spend on this technology? The important pre-Christmas sales period will provide some strong indicators.

Apps the New Money Makers?

Content is mediated for reasons of quality control, both in terms of suitability for the living room and to keep the apps bug free. But mediation of content is also important in order for CE manufacturers to make money from these stores. By supporting and promoting certain brands and disallowing others they can guarantee advertisers a certain demographic.

Currently, most of the apps are free to download but Philips, Panasonic, LG and others have plans to introduce payment mechanisms and advertising. Revenue share is already key to partnerships with Netflix .

The eventual profitability of the TV app store may be influenced by a number of factors. Apps are designed for the "10-foot" experience, the audience sitting back on a couch in the living room.

Observers have questioned whether the viewing habits of the family are open to the type of personalization that a Facebook app would add. Watching TV is often a group activity and many of these apps present personal information and so have the potential to interrupt the viewing experience.

Connectivity could also be a stumbling block: by 2015, 47 percent of flat pannel TVs shipped will have connected features, but the user still needs to connect them at home.

So far only 40 percent of connected TVs are connected, and these may well be the early adopters.

The proprietary technologies adopted by each of the manufacturers are also seen as a potential barrier for would-be content providers to join their platforms.

Unlike for a website, partners are forced to develop apps separately for each CE manufacturer.

The quality assurance processes for each platform are understandably lengthy.

The fractious nature of the market has meant that maintaining brand consistency across all platforms in style and functionality is a complex task. If a content provider wishes to be on all the major platforms then it could end up maintaining possibly a dozen applications.

Because of this, content providers are hesitant to enter the market and cautious about who they will work with.

CE manufacturers are beginning to recognize this and in some cases are planning moves towards supporting open standards-based technologies like HTML5 and HbbTV, but these won't be ready for some time.