Consumer Electronics Show 2012

The television industry could use another revolution these days.

With the upgrade cycle to high definition sets nearing completion, the hunt is on to start another one. But so far, consumers haven’t been wowed by the new offerings.

To date 3D hasn’t been the game-changer manufacturers were hoping for. Connected TVs are intriguing, but not enough to make people want to run out and buy a set. And some candidates that sounded promising (such as Toshiba’s Cell TV) seemingly never made it past the concept phase.

To be clear, the television industry is hardly struggling. According to research group DisplaySearch, TV manufacturers sold 247 million sets worldwide in 2010, up 17% from the previous year. But with the penetration rate for high-definition TVs in the U.S. somewhere between 70% and 75%, according to NPD, the hunt for the next big thing is a furious one.

The 3D format and the connected home will continue to be features in new sets, but experts and futurists say they believe user interface will be a significant factor in future sets. Apple’s long-rumored television set is thought to be based, in part, off the Siri voice search functionality found in the iPhone 4S — and a recent update to Microsoft’s Xbox 360 lets users discover content though voice search. And it’s likely other manufacturers are exploring similar territory.

“Having a conversation with a device that knows you enough that it can make a good recommendations is mind blowing,” says Brian David Johnson, a futurist at Intel who specializes in the television industry. “We’ve reached a point where we can say ‘I’m thinking of watching a sci-fi movie’ and Siri begins the search. That marks a change.

“And as you start to extrapolate out, you have a relationship with your devices that you haven’t had before. Your TV knows more about you and what you watch than you do. Your TV knows if you like (a program), you watch it — and if you don’t, you change channels. We can create a deeper relationship between ourselves and our devices.”

LG is already on board. The company in late December added voice recognition to its Magic Remote, (which also supports control by hand gestures, Kinect-style).

“LG has been striving to constantly improve the comfort and convenience with which our customers use the Cinema 3D Smart TVs,” says Havis Kwon, president and CEO of LG Electronics’ Home Entertainment Co. “The new Magic Remote is our latest example, incorporating new functions that will make it easier for users to approach and use the (sets).”

Part of the key to high definition being such a driver of set purchases was the shocking difference in picture quality between standard definition and HD. With 4K sets looming, manufacturers are hoping people will once again be wowed and want to convert, though industry observers say even if that happens, it won’t be a quick process.

“The amount of content that’s in ultra-high definition makes the 3D library look like the Library of Congress,” says Jordan Selburn, principal analyst for consumer platforms at IHS iSuppli. “I’d be shocked if in the near- or mid-term if that changes. … I don’t know if there’s anything in the next five years that’s going to push a new cycle.”

Of course, it’s not just features that will drive the next replacement cycle in the television industry. Economic factors come into play as well. The still-shaky state of most consumers’ finances has them hesitant to embrace high-priced, cutting-edge sets. And continued cost cutting on mid-range HD sets distracts shoppers from high-end TVs.

Also, with so many living room peripherals increasingly adding new functionality, there’s less to drive shoppers to get a new TV with bells and whistles.

“The display is one of the more expensive things in a consumer’s home,” Selburn says. “And it’s going to take longer to replace it — especially when you can add to it by buying things like a PS3. I don’t need to buy a new TV to get connectivity anymore.”

CONSUMER ELECTRONICS SHOW 2012
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