Market Insight

South Korea's Telco LGU+ Integrates a Sound Bar and an Android TV UHD Set-top Box

August 05, 2015

Paul Erickson Paul Erickson Senior Research Analyst, Service Provider Technology

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LG’s latest product for its IPTV service LG U+ takes form of a sound bar integrated with an Android TV-based UHD STB, featuring two woofers and four front speakers within a space-saving TV speaker base form factor. Though the basic concept has previously been explored by Samsung in soundbar form, this is the first integrated IPTV STB and sound system in a TV base form factor.

The device features 120 watts of amplifier power, 4.1-channel audio playback, Bluetooth connectivity to mobile devices, a headphone jack-equipped remote control similar to that of Roku’s Roku 3 DMA, voice-driven search, and automatic sound mode selection based on the content being displayed on-screen.

The set-top box runs on Google’s Android TV operating system, and has full access to the Google Play store, Chromecast / Google Cast capability, and the ability to display incoming calls and texts on the TV. The integrated product is available for $16.98 USD per month on a three year contract.

Our Analysis:

LG U+'s product takes advantage of consumer demand for higher quality TV audio and space-saving solutions such as soundbars and speaker bases, integrates a set-top box with UHD capabilities, and utilizes Android TV as an evolution of both LG U+'s existing Android-based STB strategy and an opportunity to leverage LG Mobile's use of Android in tablets and smartphones. The product also provides an inexpensive alternative to the combined proposition of renting a UHD STB at $8.45 USD per month on a three year contract and buying a separate audio solution. This integrated STB is positioned to attract new subscribers to U+ and its smart home ecosystem and to help further lock in existing subscribers that may be in the market for improved audio from their TV experience.

This product is evidence of the dual-OS strategy that exists within LG, with Android-based mobile devices and WebOS-powered smart TVs. LG employs an interesting juxtaposition of not using Android TV on its smart TVs, despite Android TV being purpose-built for the application, and using Android and now Android TV on its set-top boxes for LG U+ despite having acquired WebOS for a customized TV experience.

The product also creates a new form factor for operators, combining the all-in-one convenience of a speaker base with a managed set-top box, while also capitalizing on consumer demand for better TV audio while consuming less space compared to the typical soundbar/subwoofer combination. The combination of a high-quality Bluetooth and Google Cast-enabled speaker with a set-top box that is controllable via mobile app, may make it easier for consumers to consume audio either directly through the set-top box's apps or via a wirelessly-connected mobile device. Should the device's wireless audio capabilities be marketed properly, it may enhance the appeal of the product as saving the consumer an additional expenditure for a Bluetooth or network-connected speaker.

The combination of a video delivery device, sound system, and compact self-contained form factor may also reflect an evolution of the traditional home theater in a box concept, but time will tell if consumers in Korea and potentially other markets will adopt this new concept or it will remain niche, so far some 18,000 shipments have been deployed. Either way, LG U+ is the smallest in terms of subscriber numbers compared to its competitors Korea Telecom and SK Broadband, and has managed to drive more impressive UHD subscriber uptake - this innovative product is expected to aid this success going forward.

Geography
South Korea
Organization
LG Electronics LG Uplus
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