July 23, 2008 by David Mercer

Strategy Analytics’ latest forecasts show just how fast people are adopting connected TV devices. Our research indicates that, by the end of this year, consumers worldwide will own 186 million devices that allow TVs to access web content. While games consoles and set-top boxes dominate the market today, demand for connected flat panel TVs is also set to take off. Sony recently announced a big push on IP-enabled TVs and other devices, and other major CE vendors, while not yet as aggressive, are also moving in this direction.

By “connected TV devices”, we include a number of device segments, including flat panel TVs, DVD and Blu-ray players and recorders, set-top boxes, digital video recorders, digital media adapters and games consoles. We have excluded connected portable and mobile devices, such as handheld games consoles and IP cellphones, as well as PCs and related devices. Some people might aruge that we could also include such products as they can play a role in delivering IP content to TV displays, in which case the adoption rates would be substantially higher.

Games consoles have been the largest connected TV device segment to date, with a forecast of 79 million installed by the end of 2008. Set-top boxes and DVRs are the next major category at the moment, while IP-enabled flat panel TVs are only just beginning to appear.

But that is all set to change over the next five or six years. By 2014 we are projecting an installed base of more than 450 million connected flat panel TVs. Set-top boxes and games consoles will still play an important role, but Blu-ray players and recorders will also be significant IP content gateways by this time, with an installed base of 225 million.

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