Santa Clara, Calif. - Nearly 20 percent of all TVs shipped in 2010 featured connected TV capabilities, according to new research released Monday by DisplaySearch.
The DisplaySearch Q1 2011 Quarterly TV Design and Features Report, predicts the connected TV category to grow to over 123 million shipments in 2014 (at a 30 percent compound annual growth rate).
Emerging markets will play a major role in this growth, the firm said, with Eastern Europe forecast to grow from 2.5 million connected TVs shipped in 2010 to over 10 million in 2014.
In addition, DisplaySearch findings indicate that 33 percent of flat panel TVs sold in China in 2013 will have internet capability.
"The connected TV market is developing beyond mature regions like Western Europe and Japan," said Paul Gray, DisplaySearch TV electronics director. "With some emerging countries having excellent broadband infrastructure, the adoption of connected TV capabilities is a natural next step in TV feature innovation."
In developed regions, connected TV is a second wave following on the heels of digital broadcasting. In China, however, the adoption of connectivity is occurring in advance of digital terrestrial television (DTT) adoption.
As a result, TVs shipped into this region can decode video from the internet, but not from terrestrial broadcast.
DisplaySearch said it is expecting a surge in China driven by decoder chip costs reaching a tipping point, with current low cost for such capability.
The connected TV market, DisplaySearch said, will become fragmented and increase in complexity.
"Basic connected sets carrying enhanced broadcast services such as Hbb.TV or basic video on demand (such as Netflix, Maxdome, Acetrax or VUDU) will appeal to consumers who expect TV to remain a passive experience," the report said. "For more adventurous consumers, the smart TV segment will enjoy configurable apps, sophisticated search and navigation engines, and advanced user interfaces."
DisplaySearch defines a smart TV as a TV that can retrieve content from the internet without the restrictions of a portal, has intelligent search and recommendations, is upgradeable by its owner, and is able to network seamlessly with other devices in the home.
Gray added, "Smart TVs are adding to what is already a fast-moving and fiercely competitive battleground, with competition appearing in all directions, including mobile PC devices such as tablets and increasingly powerful set top boxes with services accessible anytime, anywhere."
The report compares the connected TV strategies major TV brands. For example, Panasonic is opting to locate intelligence in the cloud, while Samsung is building the capability into the device.
Other new capabilities reviewed in the report include the RVU standard that allows connected TVs and set-top boxes to share pay TV content, and low-power sets that can operate with no power cord using only an Ethernet cable.
The DisplaySearch Quarterly TV Design and Features Report is a quarterly update of the issues and rapid shifts in feature development in TV sets.
To obtain a full copy of the report contact Charles Camaroto at