Best Buy tests the connected TV market

Big box retailer Best Buy (s BBY) has been selling connected TVs for years now, but until recently, it has been reluctant to jump in with its own products in the fast-growing segment. That changes Monday, as the company is introducing two models of connected TVs from its Insignia brand of consumer electronics devices.

While other consumer electronics manufacturers are betting big on Internet-connected TVs, Best Buy is treading a little more cautiously. It will sell 32-inch and 42-inch models of the new Insignia-brand TVs, which will retail for $499 and $699, respectively. According to Best Buy VP of Product Management Patrick McGinnis, for its exclusive brands, the retailer decided to go with those model sizes, at least initially, because they were its best-selling TV models.

The new Insignia TVs are equipped with a TiVo-powered user interface (UI), (s TIVO) the result of a partnership first announced a year ago. The look-and-feel will be familiar to anyone who’s ever used one of TiVo’s DVRs. In addition to a simplified way to navigate a series of different types of streaming video, music and other apps, the TiVo UI also provides suggested content based on what a user has watched in the past. That said, it’s important to note that the TVs won’t have built-in DVR functionality, nor will they have the kind of universal search functionality that TiVo DVRs have.

Best Buy was clearly focused on building a TV first, with an impressive group of TV features. The LED screens feature 1080p video quality with a 120Hz refresh rate. They also come with enhanced SRS audio built-in and are ready to be integrated with its Rocketboost wireless digital audio system.

According to McGinnis, Best Buy wanted to ensure its Insignia models would be easy to use, and that they wouldn’t suffer from some of the same setbacks that other devices have seen as the market has grown up. It wanted to make sure its apps wouldn’t crash, for instance, and that any firmware updates or new apps and content would be loaded seamlessly in the background, rather than asking users to download and reboot their TVs.

By doing so, Best Buy hopes to avoid some of the customer service calls or returns that other manufacturers have dealt with, while also providing a better customer experience. But by simplifying things, Best Buy is also taking away some of the actual reason to buy a connected TV. The Insignia products being released have pretty limited access to the types of online services that make such a purchase worthwhile.

On the video side, Insignia TVs only have access to Netflix, (s NFLX) Best Buy’s CinemaNow, YouTube (s GOOG) and Insignia On Demand (a Flingo-powered video service). It can also connect to Pandora (s P) and Napster for music streaming. That might be good for some entry-level TV buyers, but the lack of comparable services like Hulu Plus or Amazon Instant Videos (s amzn) (which CinemaNow replaces) could be a big disappointment to those looking for a more robust set of online services. While Best Buy hopes to add more video services, it’s not clear how soon they will appear.

Rather than introducing a whole new application development platform to the market or use a platform like Google TV (s GOOG) for app developers, Best Buy’s TVs rely on Chumby apps for additional widgets and functionality. That might give users access to some additional widgets for social networking, news, traffic or weather, but there are very few additional video apps that are available on the nascent Chumby platform.

Relying on an open platform like Chumby could make it easier for developers to make apps for the devices. However, since these two Insignia models are some of the first to actually use the platform, developers could choose to hold out until other CE manufacturers also integrate it into their own devices.

For Best Buy, the introduction of connected TVs is clearly a big deal, especially since it spent so much time trying to make the end product foolproof and easy to use. For entry-level users, that could be a big selling point as they try to choose between connected TVs. But the dearth of streaming content and apps actually available through the new products could end up being a disappointment for users who are looking for a more advanced connected TV.