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Smart TVs Turning On With Your Voice Seen Spurring Profits: Tech

January 18, 2012

Jan. 10 (Bloomberg) -- Television makers LG Electronics Inc., Samsung Electronics Co. and Lenovo Group Ltd., mired in competition over flat-screen prices, are introducing interactive features to give shoppers a reason to buy a new set.

At the Consumer Electronics Show in Las Vegas opening today, LG and Lenovo will show TVs that allow users to search for shows and Web applications with natural-sounding voice commands. Samsung introduced three high-end models with so- called Smart Interaction technology, which builds in motion- sensing and voice-command software similar to Microsoft Corp.’s Kinect peripheral for the Xbox 360 video-game console.

“You now can turn on your TV simply by saying, ‘Hi TV,’ and you can change channels simply by talking or gesturing,” Ethan Rasiel, a spokesman for Suwon, South Korea-based Samsung, said in an interview.

Getting consumers to pay up will be tough. Last year, most buyers shunned sets bringing “Avatar”-like 3-D theater experiences into the living room. Since 2009, the average price of an LED TV, the most common type sold in the U.S., dropped 35 percent to $817 from $1,254, according to researcher NPD, which projects a 16 percent decline this year. Three-dimensional sets made up 9 percent of sales in 2011 through November, from 2 percent a year earlier.

Manufacturers also confront a rapid customer shift away from traditional TVs. The number of people tuning in to TV sets in a typical week fell to 48 percent in 2011 from 71 percent in 2009, according to an Accenture survey in countries including the U.S., China, Russia and Brazil. Those planning to buy a TV set during the next 12 months declined to 32 percent in 2011 from 35 percent in 2010.

Grabbing Consumers

To break out of the slump, set makers are introducing features to grab consumers as the switch to flat panels did eight years ago, when millions of consumers swapped out their cathode-ray tube, or CRT, sets.

“There’s a lot of good technology and connectivity that we’ve been putting out there, but that may be less revolutionary for consumers than the form-factor change of so long ago,” said Jeff Barney, vice president for Toshiba America.

Manufacturers are offering models that connect to online content and wirelessly to smartphones, tablets and personal computers. Improved screen technology and thinner designs are also part of new lineups as they struggle to persuade shoppers to pay a premium.

Lenovo, based in Beijing, will initially sell sets with voice-command features in the Chinese market.

Watching Apple

Some models sold by Samsung this year will have facial recognition features that can detect users and automatically log them onto Web-based services including Skype Technologies SA’s Internet calls, said Lee Kyung Shik, a vice president at Samsung’s TV business.

“Our ‘smart’ TVs will get smarter,” Lee said. “TVs will be able to listen, see and do things for consumers and viewers.”

Many of the new features are already used on other devices, such as the Xbox’s Kinect. Apple Inc.’s iPhone 4S provides voice-interaction software called Siri that tries to answer questions like: “What’s the weather today?”

Apple co-founder Steve Jobs told his biographer, Walter Isaacson, before he died that the company was working on a new TV interface.

Samsung, LG and other makers are also increasing sets’ processing power and memory to give viewers the ability to do several things at the same time, like stream content and videoconference via Skype with friends.

Sales Goal

Samsung aims to sell more than 50 million flat-screen sets this year, compared with about 43 million units last year, Yoon Boo Keun, head of the company’s consumer-electronics business, said at a media briefing in Seoul. That would be a faster pace than the industry’s projected growth of 7 percent to 8 percent, Yoon said.

Like Samsung and Tokyo-based Sony Corp., LG is looking to televisions using organic light-emitting diode, or OLED, technology to prompt consumers to replace sets more quickly. With OLED, individual pixels can glow without a separate light source. Sets can be made wafer-thin, or in entirely new sizes and shapes.

LG, based in Seoul, plans to begin selling a 55-inch ultra- thin OLED television, and include its motion-sensing Magic Remote, which also adopts software from Nuance Communications, the world’s largest supplier of voice recognition technology.

None of the manufacturers disclosed pricing plans.

New Technologies

OLED sets are expected to sell for $6,000 to $8,000 this year, said Kumu Puri, a researcher and senior vice president in Accenture’s electronics and high-tech industry group.

“It will take some time before we see wide-scale adoption,” Puri said.

Sales of giant, 60-inch flat-panel televisions jumped 160 percent last year only after Sharp and Samsung introduced models priced well below $2,000, according to NPD DisplaySearch.

Sony and Toshiba also were expected to show set sets that incorporate so-called 4K resolution of 4096x2160 pixels, or double the resolution of current high-definition TVs.

Such sets may be years away from retail shelves because of a lack of high-definition content that can take advantage of the technology, Kaz Hirai, executive deputy president of Sony Corp., said in a recent interview.

While Web-connected televisions won’t stop the industry’s price slide, they give set makers the ability to build advertising businesses and partner with Google Inc., Facebook Inc. and others, Skott Ahn, LG’s chief technology officer, said in an interview.

“We are trying really hard to bring new connectivity to our customers and share revenue with our partners,” Ahn said. “When you look at it as part of a strategy, it’s the centerpiece of the home.”

--Editors: Anthony Palazzo, John Brecher

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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