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Google’s Chromecast may pose threat to smart TVs

Updated : 2014-06-20 19:27

Chromecast may pose threat to smart TVs

By Bahk Eun-ji

Google Chromecast, which made its debut here last month, is gaining popularity and favorable customer reviews.
Chromecast is an adapter ― about the size of a USB stick ― that plugs into a television and allows users to mirror content such as videos, music, photos and apps from a computer, tablet or smartphone onto a TV screen.
Google sold 2.7 million Chromecasts in the U.S. last year and about 200,000 in Korea over the last month. Amid its growing popularity, some experts believe Chromecast could threaten smart TVs because of additional functions they do not offer. 
A smart TV allows users to watch shows and surf the web at the same time.
However, with Chromecast users can easily stream content such as YouTube videos, Google Play movies and apps to the TV.
So far, users have been satisfied with the device.
“I use a mid-level smart TV but still bought Chromecast because it makes it easy to watch YouTube videos. But what’s most attractive to me about Chromecast is that it is much faster than iOS or Android apps and gets updated a lot more often,” said Shin Yoon-seok, an office worker in Seoul.
But, he added, Chromecast is simply an added convenience because he can still send YouTube videos from his smartphone to the TV without it.
“The main advantage of Chromecast for me is that it allows me to use my phone apps instead of the smart TV interface,” he said.
Meanwhile, TV manufacturers such as Samsung Electronics do not think Chromecast will threaten their business because the device has limited functions.
“Like Chromecast, smart TVs provide video streaming, but our TVs have even more features like voice and gesture control, not to mention, social media and various other apps,” an official said.
He said the company actually welcomes Chromecast because it will help make the smart TV market bigger.
However, research suggests that majority of customers are satisfied with Chromecast despite its limited functions.
According to market research company NPD last year, most users (60 percent) only use the device’s video streaming function. Only 10 percent said they use the app function.
In that sense, Chromecast provides adequate functionality for a reasonable price, but analysts say it won’t significantly affect the smart TV market mainly because it’s still small.
“Smart TVs have yet to resonate with customers because they don’t provide a better platform than desktop PCs, tablets and smartphones,” said Jonathan Hwang, a tech analyst at Daewoo Securities.
He also said the smart TV market has failed to attract customers and to grow. “So, Chromecast has had a limited effect on the market,” he said.

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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