Free Alibaba LCD TV Could Further Threaten Chinese TV Makers, Analyst Says

Reported plans by Alibaba to offer LCD TVs as a promotional tool would put more pressure on traditional Chinese TV vendors, DisplaySearch analyst David Hsieh said in a blog post. Hsieh was responding to discussions in the Chinese LCD TV supply chain about e-commerce company Alibaba introducing an “Ali-TV” as a shopping platform for its users. “The biggest attraction is that the TV might be offered for free,” Hsieh said. A free TV would “definitely threaten many traditional TV players” and represent a “totally different business model where the TV is seen only as a tool to promote other services, such as e-shopping,” he said. Hsieh compared the strategy to that of telecom providers subsidizing smartphones. “So why not free TVs, too?” he said, saying smartphones and TVs are similarly priced. Already, new players have entered the TV market in China, including Internet service providers, content providers and telecom operators who are “eyeing new opportunities” outside of TV hardware and entering platform, content, terminal, advertising, apps and broadband service markets, Hsieh said. That has created “tough competition for traditional TV brands that have focused mainly on enhancing the display performance to add value,” he said. Envisioning the Ali-TV, Hsieh speculated it could be a 40-inch flat-panel 4K TV with “most of its hardware already in the box, independent of the display.” That would represent “a new type of TV,” in between a smart TV and a passive monitor that combines the hardware, platform, content, terminal, advertising, apps and broadband, Hsieh said. The revenue stream would come from the software, and the hardware would become “the carrier for the software,” he said.