Here's Why Apple TV And Its Competitors Are Bridge Solutions And Smart TVs Are Going To Take Over

Connected TVs are taking their place in the line-up of always-connected modern gadgets. And they are fundamentally reshaping how audiences consume media.

But there is a tension in the connected TV market between streaming devices and smart TVs, according to a new report from BI Intelligence.

For now, BI Intelligence finds that streaming devices like the Apple TV account for just over half of connected TVs in the U.S., while smart TVs take a 47% share of the market. And more streaming devices are coming to market, including a rumored upcoming Amazon TV.

Nonetheless, acc cording to the report two big factors will quickly shift the distribution toward smart TVs. The global TV upgrade cycle is getting shorter amd the prices of smart TVs is dropping.

In the report, we take a broad look at the connected TV landscape, analyzing the factors, trends, and key players that are shaping the market. We explore the explosive growth of streaming devices, such as Google's Chromecast and Apple TV, and compare it to the growth of smart TVs from manufactures like Samsung and Vizio. We also examine the relationship between connected TVs and the pay TV industry.

Here are some of the key details surrounding smart TVs from the report:

• The smart TV landscape is highly fragmented. The market share for smart TVs in the United States is dominated by five manufacturers, with Samsung and Vizio together accounting for more than 60% of market share, according to NPD.
• In most cases, these manufacturers utilize their own proprietary operating systems and software development environments, and much like Apple TV does, strike specific deals with content providers on a case-by-case basis.
• These companies hold the opinion that users are more interested in access to a few video streaming services - the Netflixes, ESPNs, and Disneys of the world - rather than deep libraries of third-party applications.
• By contrast, Roku, Chromecast, and LG (with WebOS) have bet on open platforms and opening the door to a diversity of apps and independent developers, which will likely lead to a lot of experimentation. Samsung has opted for tightly controlled platforms that only add apps in increments, and focus only on proven crowd pleasers. (Apple TV, a streaming device, also has a closed model.)

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In full, the report:

• Lays out the connected TV landscape as it stands today and how it will change in the near future.
• Highlights the key players, platforms, and devices that are shaping the connected TV market.
• Looks at the latest streaming devices to come to market and how each has altered the TV landscape.
• Projects the trajectory for smart TV shipments and the tension among smart TV manufacturers between an open and closed platform approach.
• Analyzes the relationship between connected TV and the pay TV industry, and how it will evolve in the future.