Are Mobile Devices Starting to Replace TVs?

Here in Silicon Valley, we frequently hear about the death of the TV — or at least TV as a traditional content distribution channel.  Its demise is sometimes reported to be at the hands of “over the top” technologies that stream directly from the internet (instead of cable), such as Google’s recently announced Media Set Top Box.  Other reports indicate that streaming video to our smart phones and tablet computers will make TV obsolete.   However, many folks dismiss such talk as futuristic speculation, with little present impact on Main Street, until now…

If you read between the lines in Best Buy’s August earnings release, it reported an interesting trend — double digit sales increases in mobile devices, with double digit declines in TVs.  Meanwhile there is a glut of flat screen TVs and manufacturers, and retailers are planning huge 2010 holiday season discounts just to move the inventory.  Are these coincidences, or a sign that the future has arrived?

CBS and ABC are adapting episodes of certain of their TV shows to be viewable on the iPad in a user-free, advertising based model.  Even with Research in Motion reporting record Blackberry sales in Q2 2010, and announcing a new iPad competitor, they are still losing significant market share to iPhones and Android-based devices as the sales of smartphones explodes.  These facts support the idea that many users and content providers are hedging their bets that the TV will be disintermediated.

On the other hand, many of the new technologies are based on streaming content to your TV instead.  For instance, Netflix’s new streaming video service works both on your computer and on TV.  In Germany and France, “over the top” internet-based set television has a significant market share against traditional cable, and Google is launching a similar service in the U.S. through its Media Set Top Boxes.  These product releases argue that the TV is just as relevant as ever, only with a different content delivery channel.

Is this the beginning of the end of the TV, or will it benefit from these new technologies?  Or is all of this just false media speculation to keep us off balance?  What do you think?