According to a report by DisplaySearch, over 25% of flat-panel TVs shipped this year feature Internet connectivity of some description. The report estimates that by 2015, that number will grow to 138 million, representing about 47% of the total flat-panel TV market, and a total of 500 million units sold.

The report notes that North America, Western Europe and China are the highest consumers of connected TVs, but also notes that there is growth in all regions except Japan. A large growth spurt is expected after 2015, when the Indian government will switch TV broadcasts from analog to digital -- something which has already taken place in many regions, including much of Europe.

"WiFi technologies are the foundation of smart TVs," said Paul Gray, director of TV electronics research at DisplaySearch. "We expect that in 2015, 35% of 46 inch or larger TVs in North America will be smart TVs."

A so-called "smart TV" is one that is able to retrieve content from the Internet without the restrictions of proprietary software such as that in devices like Apple TV; the ability to offer intelligent search and recommendations; the ability to be upgradeable by its owner; and the ability to network with other devices in the home.

More widespread adoption of Internet-connected televisions will be of great benefit to services such as OnLive, as well as video streaming services like Netflix and Hulu. Having such functionality built into TVs will reduce the need for dedicated "entertainment devices" to attach to the television set. But what will that mean for dedicated games consoles, of which both the PS3 and Xbox 360 are being marketed as entertainment centers rather than just game-playing devices?