The Imminent Rise of Internet TV

Includes: AAPL, DELL, GOOG
by: SoundView Technology Group

By Kris Tuttle

So far Internet TV has been slow to get started. Part of the reason is that early efforts like Apple TV (NASDAQ:AAPL) just didn’t work very well as a main entertainment system in a home.

Next week the space will get a boost as a new price/performance leader in this space, Vizio, will be shipping a new array of very nice Internet-focused TVs. By focusing on general purpose Internet attachment, these devices will serve very well as what they are supposed to be (a TV) but also enable a range of new entertainment and gaming services to be delivered seamlessly and easily over IP networks.

Click to enlarge

Vizio Overall Specs.jpg

Now instead of having to watch Cable VOD on the TV and Amazon (NASDAQ:AMZN) or Netflix (NASDAQ:NFLX) VOD on your computer, it will be easy to watch everything on your beautiful, large TV with a sound system and comfortable chairs.

Some have noted that the average consumer is not in a condition to buy these iTV units since they only recently went to HDTV. That may well be the case but it will only slow the take-up rate, not stop it. In fact, I think that we tend to underestimate how powerful the pull of a new entertainment unit like this is for most consumers. It’s not unusual for a home to have multiple TV sets and we see most incremental purchases including these new features to help “future proof” current purchases.

Vizio is also demonstrating that we are starting down the path of wireless connectivity with the TV. Most “media centers” have been put together in part to deal with the mess of connecting cables that swirl and tangle behind the multiple units that comprise the system. A number of companies have been focused on very high speed wireless methods so that the only connections needed will be power cables.

The remote provides an early example of what we expect to see in the space. This one covers the basics but in the future they will be more elaborate and functional.

Vizio Remote.jpg

With bluetooth it will be easy to add better keyboards as well as specialized devices for gaming and device networking applications.

In summary we think 2010 is the start of Internet in the living room; from the iTV to the iPad it’s going to be busy. It’s also one step closer to 3D, as well, which may be another driver that kicks in starting in 2011.

This link can be used to view these at and to pre-order if you want to be the first on your block to step into what will be more entertainment without all the proprietary borders and limits.

This seems like something Dell (NASDAQ:DELL) should be leading the charge in, no?

Update: And don’t forget that Google (NASDAQ:GOOG) is taking YouTube to new levels with a redesign and more watchable features like live concerts. The rise of Internet TV will be very good for Google.

Disclosures: None