Market Watch

Netgem ODMs Toshiba Connected TV

September 22, 2010

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Toshiba has partnered with French TV technology vendor Netgem for its connected TV platform. The move will see the connected components of Toshiba's new TV sets installed in the new set-top box (STB), which will be compatible with any brand of TV and carries a recommended retail price of €99. The product will be initially available in France, with content accessible via Toshiba Places, an online portal from Toshiba that enables multiscreen viewing.

Many TV manufacturers are currently investing in producing in-house software for the latest generation of connected TV's, whilst others like Sony will directly integrate platforms like Google TV into some of their sets. However, these efforts have lacked the sophistication of the counterparts in the pay TV space. Against this backdrop, Toshiba's decision to implement Netgem's user interface (UI) marks a major difference in strategy. Further separating Toshiba from the rest of the TV manufacturers is its decision to remove the connected components from its connected TVs, a move which places them in competition with other standalone over-the-top (OTT) streaming STBs, such as Apple TV.

The growing brand power of OTT streamers, illustrated by Roku's recent partnership with Netgear, could well provide motivation for Toshiba's strategy. With the streamer likely to be packaged together with new Toshiba TV sets, outboarding the box allows consumers to access the new Toshiba Places portal via non-Toshiba TVs. However, selling these boxes as a standalone proposition could prove challenging.

In general, primary TV sets are still largely the domain of pay TV operators, and with the growth of connected TVs it is unlikely that any standalone STB will have the content offering necessary to significantly affect the primary TV set market. Yet with consumers likely to be hesitant to buy expensive high-end STB's for secondary TV sets, there is an opportunity here for mid-range devices offering a set of specific services. The battle for these secondary TV sets is could potentially allow new participants to gain a foothold in the home - and low prices allied with large video on demand (VOD) content render these new IP streamers attractive impulse purchases for consumers looking to supplement their secondary TV viewing. With pay TV operators pushing multiroom DVR and multiscreen offerings, there is a potential split in the market, between connected TV households centred about high-end pay TV services and those that are based purely around networked consumer electronics devices.

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