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Smart TV Alliance Good News for Consumers, Manufacturers

smarttvalliance-0612LG Electronics and TP Vision (for Philips TVs) officially established last week the “Smart TV Alliance” with other TV manufacturers in the process of joining. According to a joint press release, the Alliance forms a cooperation that aims at enhancing the Smart TV experience by creating “a non-proprietary ecosystem for application developers to create attractive, platform-independent services.”

The foundation of the Smart TV Alliance comes after the collaboration announcement of the TV makers at IFA 2011 in Berlin. The names of other players that are joining the Alliance will be announced later on the Alliance’s website. New partners can join in this effort through the newly established Smart TV Alliance Consortium (www.SmartTV-Alliance.org), whose overriding objective is to help define technical specifications, which will enable application developers to create their applications once, and run them on multiple TVs, regardless of the platform.

Alain Perrot, a Smart TV Alliance Executive board member from TP Vision, says that reduced application development time and costs will be beneficial for all: “Instead of spending valuable time on porting and testing on different platforms, developers can focus their creativity solely on realizing apps that consumers will enjoy. Now we can really make it interesting and fun for everybody.”

Smart TV Alliance will make the first version of its software development kit (SDK) available on its website, which developers can download at no cost and use to develop their applications. The SDK is based on open web technologies such as HTML5 and allows for developed web applications to run on Smart TV’s from participating members regardless of the underlying platform. The Alliance plans to build on this first version and announce specifications of SDK 2.0, followed by the actual SDK 2.0 software release, at the end of this year. With SDK 2.0, developers should be able to create applications for 2013 TV sets from participating Alliance members.

Back in April, Royal Philips Electronics announced that the transaction to create a joint venture with Hong Kong-based display manufacturer TPV Technology Limited had been completed. The joint venture is called TP Vision and is 70 percent owned by TPV and 30 percent by Philips. TP Vision will develop, manufacture and market Philips-branded TV sets outside of North America. As part of the transaction, the Philips Television innovation and manufacturing sites, commercial organizations, headquarters and employee base of close to 3,300 will transfer to TP Vision. Philips Television has operated as a standalone business within Philips Consumer Lifestyle since January 1, 2012.

Since 2008, Philips has maintained a brand licensing agreement with Funai Electric Co., Ltd. of Japan, under which Funai has the responsibility for the sourcing, distribution, marketing and sales activities of Philips’ consumer television business in the United States and Canada. The five-year minimum agreement stipulates that Funai will pay royalty payments in exchange for Funai’s right to exclusively use the Philips and Magnavox brand names for the TV offering in North America during the agreement period. Funai already distributed televisions under various brands and has been well recognized as a leading supplier by retailers who carry Philips televisions. The Funai license is conditioned on compliance with Philips requirements on brand use, product quality, product design and consumer care.

For decades, Philips has struggled to get traction in the worldwide TV market, and its realization that it cannot grow the business in this area has been long and slow. The agreements with Funai and TPV, together with a shifting corporate emphasis towards personal and professional health care products, underscore the increasing likelihood of a future Philips with little or no involvement in TV or even entertainment-based consumer electronics. Meanwhile, while not immediately clear how the LG-TPV-founded Smart TV Alliance will impact Philips (i.e., Funai) TVs in North America, it is reasonable to expect that future products will support the initiative-and cross-product conformity to an Internet-friendly interface should reap many benefits to the entire content delivery ecosystem.

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