October 13, 2011 at 13:03 PM EDT
Companies That Will Fix the Flagging TV Market By 2013
Apple, Google, Sony and others all working on pairing tablet technologies with television sets, which could be the eventual spark TV sales need.

You would think convincing people to buy televisions would be easy. Manufacturers like Sony (NYSE:SNE) and retailers like Best Buy (NYSE:BBY) are facing consumers that are only spending on budget-priced sets, meaning what sales they do make are worth less.

An August report from research group Quixel said LCD TV sales declined 3% during the second quarter and revenue stayed relatively flat at $3.8 billion for the quarter. The value of LCD sets, however, fell 16% year over year. By the end of the year, DisplaySearch expects the entire industry toship just 248 million televisions worldwide — almost flat with 2010′s 247 million.

What is going to get consumers buying televisions again? It isn’t 3D TV — consumers have spoken on that technology. Is it Internet-connected smart TVs? The technology seems close to capturing attention, but it’s still far away from mass success. Connected sets made up 21% of all television sales in 2010, but nearly half of owners don’t use the features.

Chipmaker Intel (NASDAQ:INTC) has decided to stop developing smart TV technology altogether, choosing instead to focus on popular smartphones and tablets.

But it might be those devices that ultimately revitalize the television industry.

Sony, Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Motorola Mobility (NYSE:MMI) are just a few of the companies working fast to meld their mobile and television businesses into cohesive wholes. Google attempted to kick-start the smart television industry last year with Google TV, an operating system for smart TVs made by Sony. Apple, too, tried to capitalize on new technology last fall, introducing a new model of Apple TV set-top box that allowed video to stream from the iPad to televisions via an app called AirPlay. The thinking was that, with consumers increasingly supporting streaming television businesses like Netflix (NASDAQ:NFLX) and Hulu, they would be drawn to having those services stand alongside standard television options in a living room setup.

The problem is that the technology to hook consumers wasn’t in place yet. Google and Sony’s interface was unwieldy, and content providers like News Corp. (NASDAQ:NWS) and Disney (NYSE:DIS) blocked the device from accessing a good deal of streaming content. While consumers flocked to the iPad, they remained indifferent to Apple; Apple has sold nearly 29 million iPads but just 2.3 million Apple TVs since 2010.


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