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Samsung Likely to Lead Apple in Smart TVs... For Now

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The Korean company's showing at CES was strong and we're still speculating about Apple's entrance into the smart TV market.

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According to Yahoo Finance, the global market for consumer electronics is expected to hit $1.1 trillion by 2013. Down the road, MarketResearch.com expects the global TV market to reach $200 billion by 2018. Finally, according to a survey done by Accenture, 33% of consumers plan to upgrade to a new HDTV this year, up from 20% in 2012. We are entering a new phase in television technology, with terms being thrown around like OLED (which I will hit upon in a bit). The new wave of smart televisions is about unfold, and after its showing at the Consumer Electronics Show, Samsung (PINK:SSNLF) appears to be beating its competitor Apple (NASDAQ:AAPL) to the smart TV market, and maybe beating Apple in terms of connected devices in general.

In 2012, Samsung shipped 40% more so-called "connected devices" (devices that communicate with other devices) than Apple did, a fact that was flaunted in Samsung's CES keynote address. And whereas Apple has only rumors and speculations to its name for its entrance into the smart TV market, Samsung made waves at CES this week with the unveiling of its new flagship TV, the F8000, Samsung's preemptive answer to the Apple TV.

The F8000 will be available in five sizes between 40 and 75 inches (which is the range Apple is speculated to be working with), and will run on a quad core processor. The TV's features include Internet and social networking access, access to apps, and an advanced content guide with a voice recognition application called S-Recommend. Included will also be Samsung's new Smart Hub, which will come with all of its smart TVs. The hub has five panels that allow consumers to manage and navigate different kinds of content -- whether it be television, film, or Internet -- all very easily and intuitively.

In addition to the F8000, Samsung has announced a new line of OLED TVs. OLED stands for Organic Light Emitting Diodes; the technology allows for sharper pixels and makes possible an absolute black pixel. Moreover, it will mean that images can be bigger without losing clarity, so the potential size of televisions will likely increase. In fact, Samsung announced a 110-inch television, still in prototypes, that runs with 4K technology, which means it has four times the resolution of current high-definition televisions, also allowing for large screens with no loss of clarity. On top of this, Samsung announced an OLED TV with a curved screen that allows for more viewing angles with the clarity a viewer would have if watching the screen straight on. The technology, which may catch on, perhaps on a purely aesthetical level, may have implications for curved phones and tablets yet to come. This is another potential area where Samsung may potentially lead Apple, but I digress.

Apple has been working on and employing high-definition screens in its MacBooks and now its iPad, with its Retina Displays. Ironically, the company often notes how these screens have more pixels than large TVs.

So will Apple end up the follower in the smart TV market? At this early point, and after Samsung's strong CES showing, it seems likely... but it is still important to consider the future of content for smart TVs. Also a source of rumors and speculation is Apple's attempt to sign content providers, and rumor has it that no major deals have been made. As self-professed "Apple Holic" Jonny Evans of Computerworld writes in his article about Samsung's showing at CES, "People in the TV industry make a lot of cash through advertising, they don't want to share that money with up-and-coming technology firms."

That being said, avenues for online advertising are growing, and leading the pack is YouTube. Google (NASDAQ:GOOG) has been working hard to make its $1.65 billion acquisition more than just a place for users to put up videos. Original content and relationships with major studios are making YouTube that something more, and Samsung has extensive support for YouTube on its new F8000 smart TV.

Apple offers content through its iTunes stores, but competition from ad-based content providers like Hulu and YouTube is heightening pressure for free content with ads as opposed to Apple's premium, ad-free content. For the consumer, a price tag of $0 generally justifies a few ads.

Along with Samsung, LG, Toshiba (PINK:TOSBF), Sony (NYSE:SNE), and Vizio (which showed by far the cheapest 4K TV, its XVT) have all unveiled smart TVs at CES. The market is obviously about to change again for TV consumers. If Samsung can secure a wide, varied stream of content, it seems that it may be set to lead Apple in this new generation of smart, OLED, and 4K televisions. This being said, we don't know exactly what Apple is working on, and we've been surprised by Apple before. As always, we'll have to continue to speculate until Tim Cook takes the stage in a black turtleneck.
No positions in stocks mentioned.
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