The remote less traveled leads to smart TV

PCs were born smart; cell phones acquired smarts via a brain transplant. But TVs have remained comfortably dumb for decades despite playing a role in the multi-billion-dollar video game software market that has created some of the most sophisticated applications ever purchased by consumers.

For the past decade, TiVo has added a dizzying array of Internet-delivered content options from Yahoo, Rhapsody, Napster, Netflix, Pandora, and others, and popular game consoles such as the and Xbox 360 have also offered ways to obtain movies on demand.

The end of 2010 saw an explosion of other gateway devices entering the market-- inexpensive streaming products such as Roku and Apple TV; PC bridges such as the Imation Wireless Link and Veebeam; and products that have integrated storage such as the Cirago TV Platinum and Western Digital WDTV Live Hub.

But the most intriguing of these products are those that are little more than showcases for operating systems that aspire to live on high-volume devices such as Blu-ray players and TVs. They include D-Link's Boxee Box (soon to be joined by a similar product from Iomega) and Logitech's Revue powered by Google TV.

The good news for these companies is that while relatively few TVs contain Internet connections today, the number is rising. According to NPD's Retail Tracking Service, 11.5 percent of flat-panel TVs sold in 2010 were capable of Internet connectivity. The number rises to almost 24 percent when one looks at TVs above 40 inches.

Virtually all 3DTVs, for example, are also connected TVs, opening a pathway for delivery of 3D content. NPD recently surveyed owners of these connected TVs to find that nearly half (46 percent) had actually connected their TVs to the Internet, an impressive number given that relatively few of these sets include Wi-Fi and that so few consumers have wired Ethernet connections in their living rooms.

With so many ways to access broadband content on televisions, connectivity isn't exactly pulling consumers to TVs. However, 57 percent reported being very satisfied with the connectivity features of their televisions, demonstrating that connectivity may be a "sleeper" feature that can aid in recommendations and demonstrations to friends and neighbors.

Now that consumers are tuning into TV apps such as Netflix and YouTube, they may be ready for the next step in opening up TVs to the Web at large and third-party developers that they can access on PCs and smartphones. In particular, consumers indicated interest in two of the main features of Google TV--the ability to search across cable and broadband programming and open access to the Web.

Just as smartphones have cannibalized an array of other portable electronics categories, we may see smart TVs put pressure on the array of set-top boxes for playback that have included DVRs, DVD, and Blu-ray players, and video game systems.

And yet, with smartphones and tablets being used more in the living room, we may also see them play interplay with new screens. The little screens will be capable of control and supplemental Web or video content in consumers' hands for a personal experience while the big screens vie for their eyes in a shared one.