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Would a Big Year for Smart TV Stocks Leave US Firms Behind?

James Dennin, Kapitall: TVs with internet are the hot item at the Consumer Electronics Show. Is a big year for smart TV stocks ahead?

Like personal computers, the makers of television sets had a difficult year in 2013. For one, there's the mounting excitement for mobile options, which make watching something on a TV set seem passé. And there's been limited innovation in recent years, aside from making TVs that are larger, flatter, and lighter.

Read more on Media from Kapitall: Why Netflix Won’t Replace TV Stocks and Take Over the World at $7.99 Per Month

That's set to change this year, at least as early reports from this year's Consumer Electronics Show (CES) in Las Vegas seem to suggest.

Samsung (OTC:SSNLF), the world's largest maker of TVs, is bullish on smart TVs, and will devote 75% of production to them in 2014. With foreign firms like  Sony (SNE), LG (LPL), and Philips (PHG) moving aggressively into the space - and American firms like Intel (INTC) getting out – could companies at home be left in the dust? 

Probably not

While the biggest manufacturers of smart TVs are all located overseas, if there's another big trend at CES, it seems to be that hardware will serve software even more in the years to come. And there's no question that many American companies are already adapting. 

There's a lot of hardware produced by American firms that would turn older TVs into smart ones. And those tech stocks are finding new ways to keep their hardware competitive, often via new software. Since TVs are a household item that you don't really replace very often, this could be a huge asset.

That's the bet that Google (GOOG) made, by focusing on a low-cost adapter for analog TV sets called the Chromecast, and a new high-speed streaming service to compete with Netflix (NFLX).

Aside from streaming, the apps available on smart TVs can be extremely valuable as well. Apps that are available for a certain smart TV can be one of the major draws, as manufacturers learned with the steady rise to prominence of the Chromecast. A move to smart TVs could create pressure for firms like Time Warner (TWX) , whose HBO Go app is becoming a mainstay for new devices moving into the space, to broaden their offerings. 

Finally, there are firms that produce component parts for TVs, some of which are located in the US. Battered chip-maker NVIDIA (NVDA) is a leader in this space, recently announcing a new line of chips for 3D TVs, which would be among the best in the world. 

Will new software and hardware boost smart TV stocks, and your portfolio? We compiled a list of some of the stocks to watch in 2014. 

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