Smart TV Market Analysis

Smart TV Market Deep Dive – PESTLE, Porter, SWOT

The smart TV market is going through a transitional phase where rapid technological advances are accompanied by changing consumer preferences. Streaming, gaming and connectivity are becoming more important to households and smart TVs have become the centre of the entertainment universe. The convergence of high-definition screens, artificial intelligence and smarter user interfaces has enhanced the viewing experience and made smart TVs not just a luxury but a necessity in the modern living room. Also, the proliferation of streaming services and the growing demand for a more personalised experience are driving innovation and competition. The smart home concept is also making a big difference to this dynamic market. As the market evolves, it is essential for all players to understand the key trends, the consumers’ attitudes and the latest technological developments.

PESTLE Analysis

• Political:
  In 2024, the smart-TV market will be influenced by many political factors, including government regulations on digital content and broadcasting. The FCC, for example, has ruled that all new US TVs must be compatible with ATSC 3.0, the next-generation broadcasting standard, by 2024. This will improve the quality and interactivity of the viewing experience. This regulation will affect manufacturers and may increase production costs as companies invest in new technology to meet the standard.
• Economic:
  In 2024, the economy is characterized by a strong growth in the consumption of electrical products, and the estimated expenditure per household on smart devices is estimated at 1,200 yen. The rise in consumption is accompanied by a rise in income, which in the United States alone is expected to grow by 3.5%. In addition, the rate of inflation is expected to stabilize at a low level of 2.1%. This makes it possible for consumers to spend more money on entertainment technology, such as smart TVs, thus increasing the demand for smart devices.
• Social:
  In 2024, the trend is toward a greater use of digital services than of cable. In the United States, approximately seventy per cent of households subscribe to one or more digital services. This evolution has a determining influence on the consumer’s behavior, as a growing number of people are looking for a better integration of these services on smart televisions. Moreover, the growing popularity of the binge phenomenon has led to a greater demand for larger screens, and of the total number of smart-televisions sold, fifty-five-inch and larger models represent forty-five per cent.
• Technological:
  In 2024 the Smart TV market is rapidly evolving, with features such as AI and IoT integration becoming the norm. It is estimated that by 2024 more than 60% of Smart TVs will have AI functionality that enhances the experience of the viewer with a bespoke content recommendation service. Also, the use of 8K resolution will increase with about 15% of new Smart TVs offering this ultra-high definition format. This reflects the industry’s drive to provide ever-increasing quality of image.
• Legal:
  Legal aspects in 2024 are largely influenced by data protection laws, especially in the European Union, where the General Data Protection Regulation (GDPR) continues to affect the way smart TV manufacturers handle the data of their customers. Companies must comply with these regulations, which can lead to high legal costs. For example, the maximum fine for non-compliance is 20 million euros or four percent of the turnover, whichever is higher. This means that manufacturers are investing in data protection.
• Environmental:
  During the next few years, the manufacturers of smart TVs will have to be more aware of the environment. In 2024, it is estimated that 30 per cent of smart TVs will be made from recycled materials, as companies seek to reduce their carbon footprint. The Ecodesign Directive, which came into force in the European Union in July 2016, will mean that by 2024, all electrical appliances, including smart TVs, will have to meet certain energy efficiency standards. This could lead to a 25 per cent reduction in energy consumption compared with the current models.

Porters Five Forces

• Threat of New Entrants:
  “The threat of new entrants is moderate for the smart-TV market in 2024. The market is attractive, but the established brands have considerable brand loyalty and economies of scale that could be difficult for new entrants to overcome.” “In addition, the high cost of developing new products and marketing them could be a deterrent to new entrants.”
• Bargaining Power of Suppliers:
  Suppliers of the smart TV market have low bargaining power due to the number of component manufacturers. The market is characterized by a large number of suppliers for the most important components such as displays, processors and software. The resulting high degree of supplier diversity enables manufacturers to easily change suppliers and thus reduces the power of a single supplier.
• Bargaining Power of Buyers:
  The buyers of the smart TV market have high bargaining power because they have a lot of choices. Various brands and models can be compared with each other. And consumers can easily compare the price and features of each. Competition forces manufacturers to continuously improve and compete, and consumers' bargaining power is further increased.
• Threat of Substitutes:
  The threat of substitutes in the smart-TV market is moderate. While both conventional TV sets and media players can be considered substitutes, smart-TVs have a number of unique features, such as their built-in streaming services and smart-home capabilities, that make them less vulnerable to substitution. But the emergence of new forms of entertainment, driven by technological development, could pose a threat.
• Competitive Rivalry:
  Competition in the smart-TV market is intense, with many established players vying for market share. Brands are constantly launching new models to attract consumers, and this has resulted in a fierce price war and an explosion of new models. The result is that companies are constantly trying to enhance the product’s features and improve its after-sales service, thus making competition even fiercer.

SWOT Analysis

• Strengths:
  • High demand for streaming services driving Smart TV sales.
  • Integration of advanced technologies like AI and voice control.
  • Growing consumer preference for larger screen sizes and enhanced picture quality.
• Weaknesses:
  • High competition leading to price wars and reduced profit margins.
  • Dependence on internet connectivity for optimal functionality.
  • Potential security vulnerabilities associated with smart devices.
• Opportunities:
  • Expansion into emerging markets with increasing disposable income.
  • Partnerships with content providers to enhance user experience.
  • Development of new features such as augmented reality and gaming capabilities.
• Threats:
  • Rapid technological advancements leading to obsolescence.
  • Economic downturns affecting consumer spending on non-essential items.
  • Regulatory challenges regarding data privacy and security.

In 2024, the Smart TV market will be characterized by strong demand driven by streaming services and technological advancements, but will be challenged by intense competition and security issues. Opportunities for growth will arise in emerging economies and through strategic alliances, while rapid technological change and economic instability will threaten the stability of the market. The companies in the market will have to use their strengths and address their weaknesses to take advantage of the opportunities and protect themselves from the threats.