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An important milestone was passed in early 2016: more than half of TV sets shipped globally in first quarter 2016 were smart TVs. The acceleration in the uptake of internet-connected TVs was led by China, where four out of five TV sets shipped with smart functionality. Meanwhile, despite a seasonally quiet quarter, 56 per cent of North American TV shipments were smart TVs, according to IHS Inc. (NYSE: IHS), the leading global source of critical information and insight.
“It is a remarkable result,” said Paul Gray, principal analyst for IHS Technology. “China and North America continue to experience growth in the share of smart TVs, and the feature is now established in entry-level products.”
By contrast, shipments have stagnated in Europe and Japan in recent quarters. In Japan, only 38 per cent of sets shipped with the feature, the lowest result recorded since 2011. European shipments have remained stable at the 40 per cent to 45 per cent level for the past two years. “It’s all about content,” said Gray, “where the local offering is relatively weak, consumers are reluctant to pay extra for built-in internet TV services. Good streaming content in local languages remains the key to value in smart TV.”
The Android operating system now accounts for almost half of smart TVs shipping in the first quarter of 2016. However, when examined more closely, Tizen leads all other regions and accounts for 43 per cent of smart TVs shipped outside China. “Android in various forms has been wholeheartedly adopted by Chinese brands,” Gray said. “The first quarter of this year was exceptional, with seasonally strong sales in China, but weak sales elsewhere, and it is clear the Android-based solutions have a global lead.”
North America has an additional Smart TV platform option, Roku. For Chinese brands, the addition of the Roku TV capability to TVs significantly bolsters product value. In fact, Chinese brands are typically shipping around 10 per cent to 20 per cent of products with smart featuring in Europe, whereas Roku partners in North America ship over 90 per cent with the feature. “Smart TV is becoming a critical factor in Chinese brands’ export development,” Gray said. “Roku TVs in North America have proven a powerful way for aggressive brands to build share with consumers confident of the value of their purchases.