The US-China trade dispute has increased adoption of smart television sets in the North American market, particularly those using the Roku operating system (OS), according to consultancy IHS Markit. Smart TVs made up 89 percent of TV shipments there in the first quarter, with Roku accounting for 37 percent. Fears of tariff rises had encouraged brands reliant on Chinese output to import more sets to North America.
IHS Markit said smart TVs in the first quarter of 2019 accounted for 89 percent of television shipments to North America, a record high for the region, up from 75 percent during the first quarter of 2018. Shipments of Roku-based sets represented 37 percent of the total North American smart TV market in Q1, up from 23 percent in the Q4. This made Roku the top smart television OS in the region for the first time since 2017. The Roku OS holds only an 8 percent share of global smart TV shipments.
Paul Grey, research director at IHS Markit, said fears of increased tariffs arising from the US-Chinese trade dispute had spurred TCL and other TV brands reliant on Chinese manufacturing to increase shipments to North America in early 2019. They hoped to build up stocks and generate as much sales volume as possible before pricing was hit by the tariffs. This strategy boosted sales of Chinese-made smart TVs during the quarter.
Chinese smart TVs make extensive use of the Roku OS, in contrast to more established brand names, which often employ their own operating systems. The boom in Chinese TV sales put Roku at the top of the North American market for the first time since the third quarter of 2017, Grey said.
Roku outstripped Samsung’s Tizen and LG’s webOS because of the popularity of the low-priced Chinese smart TVs. In turn, Chinese TV prices dropped due to the unforeseen consequences of the tariff threats, leading to a short plunge in pricing.
Xiaomi now leads TV shipments in China based on its internet services, said IHS Markit. Samsung is increasingly building Tizen apps that work with local pay-TV services in Europe, and for most consumers, buying a non-smart TV is “inconceivable”, said the consultancy.
As a result, IHS Markit has boosted its smart TV forecast. Shipments in all regions are expected to exceed 60 percent of total TV shipments in 2023. In North America, Western and Eastern Europe, China and Latin America, smart TVs are forecast to rise to more than 85 percent of shipments in 2023.
