Is Internet TV next wave after smartphones?

By Xu Jingxi (China Daily) Updated: 2015-11-26 07:28

A woman and her kid select smart TV sets at a TCL television outlet in Yichang, Hubei province. [Photo/China Daily]

Smart Internet televisions are already storming the market and tearing away young users from mobile phones and tablets, industry experts say

Internet TV that works like a smartphone in mega-size may be the next big thing and there is no shortage of manufacturing and software firms trying to capture those eyeballs in China.

At stake is a hardware market that tripled in two years to 31.7 million sets sold in 2014, and is expected to leap to 40.8 million this year and 60 million annually by 2020, according to the Shenzhen-based Qianzhan Industry Research Institute.

As televisions connect directly to the Internet and use sophisticated chips and software to stream games, movies and even classes, a sea change is expected by the young away from smaller-screen PCs, tablets and smart phones. While some might worry that all of this electronic interaction creates a generation of Internet TV zombies, Cai Zhiyang is not among them.

Cai wasted no time in clicking "pay" button just after the stroke of midnight on Nov 11 on Alibaba Group Holding Ltd's Tmall platform to buy a 55-inch smart TV for 3,799 yuan ($595), a 25 percent discount.

"For me, television is still a household necessity because it makes me feel like being home when the whole family sit together watching TV," the 28-year-old newlywed said, adding that he can't wait to put the new set in the living room of his wedding house.

"Smart TVs are linked to the Internet and open for a variety of entertaining app downloads just like smartphones and tablet PCs. Why not choose a bigger screen?"

Beijing-based data analysis company All View Cloud said the latest Singles Day, as the Nov 11 online sale is known, saw 80 percent of all televisions sold as smart models.

Manufacturers and industry watchers said the shift is well underway with the search on for new business models as the days of just selling television sets become tougher on the bottom line.

"Consumer electronic manufacturers are in fierce competition as the growth of domestic market has slowed down. The profit margin of making and selling hardware only is getting thinner and thinner, which can't support an enterprises' sustainable development," said Hu Xuejun, deputy general manager of a domestic sales company under TCL Multimedia Technology Holdings Ltd.

That means looking at software, content and new advertising methods and figuring out what will sell and who to work with in development.

"Internet companies save costs by selling their products online and acquire sustainable revenues by updating the application services," said Liu Xuran, an analyst at Qianzhan Industry Research Institute.