According to a new report, Apple TV leads the market for Internet television devices, but the devices have had difficulty resonating with consumers, largely due to their cost and complexity.

“Vendors of these products have struggled with a number of hurdles that have so far made this market relatively unsuccessful,” says ABI Research director Michael Wolf. “The high cost of these devices, their reliance on the home network, the need for consumer self-installation, and the scarcity of content have all contributed to their lack of commercial success.”
Overall, ABI Research believes that this new breed of devices will see shipments of 1.2 million in 2008.

Nonetheless ABI Research believes that two factors offer new hope for these devices:

• While early examples lacked significant amounts of content, new models such as Vudu‚Äôs video device have significant libraries, including high definition movies.
• Additionally, consumers‚Äô growing hunger for both user-generated and professionally produced content on the Internet could create greater demand for these new devices.

More Compelling Free Internet Video Is Key

Wolf goes on to say that free, ad-supported Internet video may be the key to jump-starting this category.

‚ÄúThere is a possibility of a break-out success among these new entrants if they can create compelling content offerings, make consumer installation and management incredibly easy, and offer both the hardware and content at compelling pricing. We believe one way to achieve this is by incorporating some premium content using advertising support.”