Entrance into HDTV market seen boosting Apple's market cap by $100B - Page 2

Except that the HDTV market doesn't resemble the PMP, smartphone or tablet markets prior to Apple's entry. Those were all markets where existing products totally sucked and were perceived as totally sucking. (Some might dispute this for smartphones, but, before the iPhone, expect for Blackberrys, which are basically just texting appliances, people weren't rushing out to buy smartphones, and they really didn't do much.)

Existing HDTVs don't totally suck, and aren't perceived to by the general public. It's not a market crying out to be redefined.

It's less of an issue than you might think, the Play Station 3 is now 5 years old and going strong, we don't expect a full refresh for another few years. The playstation-2 is still in production. If the need is to track iPad performance then that's pretty easy, you can supply a desktop experience that will not be matched in palmtop for years to come simply because power isn't a constraint on the desktop.

I direct you to the CNET quote that I linked earlier ...

"Unfortunately for Apple, problems like that don't exist in the handset business. Cell phones aren't clunky, inadequate devices. Instead, they are pretty good. Really good. Why do you think they call it a Crackberry? Because the lumpy design and confusing interface of the device is causing people to break into cars? No, it's because people are addicted to it."

People didn't feel that smartphones sucked until Apple redefined the experience.

Hear, hear. I think it would've been impossible for any of us to predict the exact shape and content of the iPhone prior to launch, maybe because we didn't think certain aspects were possible, and maybe because it did some things we weren't asking for. But just look at the cell phone space 5 years later and how the whole landscape has changed, how much dominance Apple has within it and how much profit they generate without even selling multiple or low-end models.

I'm pretty sure that any specific prediction I make about the Apple HDTV will be wrong (but I've tried anyway) in terms of exact hardware specs, but that's not what's important here.

I just don't understand why people can't see that maybe Apple has been building their whole corporate career for this new device. Has Apple not treated the computer as a very personal experience since the beginning? Did the Mac not try to begin to converge the PC with the appliance? Are we not at the start of some kind of post-pc world where every device has the potential for powerful computing and a distinct lack-of-need for Windows as its software foundation?

I am certain that when this TV makes it's debut it will be very attention getting and very disruptive. They are going to suck up all the oxygen in that space.

I don't know if their next big move is a TV, but they clearly need another big move. They're accumulating cash at a tremendous rate and they don't seem to want to just start paying a dividend or buying back shares - they want to stay a growth stock.

Once they've locked down the tablet market and expanded down-market in phones there isn't an obvious next move for them - so whatever comes after that will have to be something that isn't obvious. We're talking 2014 or later here, but they'll be working on the ideas right now.

One option would be a head-on competitor for playstation/xbox/wii. Gaming is a historic weakness for Apple, but a console could allow them to transform it into a strength.

The control issue is a big one, but I don't think it's a deal-killer. They continue to wrestle with ATT, but they certainly can't regret making it--there was no one else out there biting. I think they would find getting a quality experience out of Toyota to be easier than getting one from those guys.

The thing is, an auto manufacturer has every reason to make this work--there's no downside for them, no risk besides hardware cost and licensing (and that is scaleable), and the upside is huge.
On the other hand, the cable and media companies are terrified of Apple, and are prone to look at any effort by Jobs & Co as the beginning of the end. If Apple successfully took over the living room, then Comcast's cable television business would plummet at the same time that it cost them more bandwidth on the internet side. They're already dealing with everyone cutting the cable. It's in their own best interest to make an Apple TV impossible.

No, they did, CNET is simply wrong.

It's not all about margin - dollars matter too. How many dollars per unit does Apple make on ATV? Maybe $25. How many dollars per unit could they make at the high end of the HDTV market? Maybe $300 or $400. In a vastly larger market.

CableCard and/or AllVid could solve the set top box issue.

I still don't buy this rumour without some level of heavy licensing to current TV manufacturers, but this new AirPlay ad caught my eye. The AppleTV is easy to miss which makes me wonder if something more grand is in the works.

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http://www.youtube.com/watch?v=6XYbVwg5B7g

At the same time, there were daily mockups and rumors of what an Apple Phone would look like for years before it was released. It would do this, it would do that. Some of them got kind of close to the final product, some were way off. That's because on a daily basis, people were frustrated with how their existing cell phones worked, and dreamt up ways to improve the experience, then projected those dreams onto Apple.

I haven't seen anyone explain what Apple HDTV would revolutionize. I'll grant you that my imagination is lacking, but I don't see where anyone else has mocked it up either. The real challenge to the end user is managing content from multiple inputs--cable, internet, over the air, etc. That's the fragmentation that Jobso has already pointed out as a dealkiller.

Making or licensing an expanded Apple TV card to HDTV set mfgs solves the issue of opening the HDTV market -- allowing them to sell the razor blades (content) rather than low margin razors (the large HDTV sets)

No - that's YOUR statement. In your fervour you cannot see beyond your own argument and completely miss my point. I am not saying it will happen, in fact I pretty much doubt it but I am not as sure as you... obviously.

You are equally self assured that Apple will not produce an HDTV as you are that a simple hw update to the existing aTV can cause it to 'singlehandedly grab dominant marketshare'. Apple should hire you.

A5 means 1080p out. iOS 5 adding "Channels" gives it software.

My thoughts exactly. There are a lot of issues, I know, but nothing would better signal Apple's arrival into the living room than an Apple branded screen. The virtues of iCloud and thus the rest of the Apple eco-system would potentially become a much easier sell to a much broader audience. I don't necessarily think an Apple branded screen would be all about margins. A departure for sure, but so was the iPod and look where that took us.

Remember how radical that deal with AT&T was though? Apple were able to sell the phones in their own stores. Apple were able to control the OS completely and to provide OS updates without any interference. Apple were rumoured to even get a kickback from operator's fees. Apple completely redefined the OEM/Carrier relationship with the iPhone.

These would be the two big ones for me, even if Apple were to make a TV. Which I just don't see happending anytime soon.

I spend most of the time in front of my TV watching TV. There is no interaction or UI to improve upon here. You sit and you watch. As #3 above points out, when you are selecting which channel to watch, you are stuck with whatever the cable/satellite company provides for you. TiVo has tried for years to provide a better alternative UI. Could Apple do better than TiVo? Probably. But dealing with the providers would be an ever bigger "bag of hurt" than blu-ray is. Just how many different versions of TVs would Apple need to manufacturer to work with all the different cable and satellite providers? And even though cable providers are required by law to offer interoperability (ie, CableCards), satellite provides are not similarly required.

Sure, you could get your content online, but that is still a very immature market. Apple's offerings wouldn't fit the needs of 99% of the population. And would you really trust that an Apple HDTV would have access to all the other online content services, current and future (#2 above)? Most Apple devices are "disposable" on a 2-4 year time frame. Most people expect their TVs to work for 5-10 years. Maybe an Apple HDTV would have Netflix at first, but what guarantee is there a future TV OS update doesn't remove it? Gambling $100 on an AppleTV isn't a big deal. Gambling $1000+ on an Apple HDTV, and that it will still access the content I want/need 5 years from now? Not sure I'd want to take that risk. Give me a cheap box I can replace over the years as my needs and the techology changes.

By that reasoning, Apple should have partnered with RIM or Motorola instead of designing a mobile phone from scratch on their own. Actually, they did just that at first with the Rokkr phone which was, predictably, a major flop. Then they created the iPhone on their own and changed the face of mobile.

Apple could own the TV market. The limitation is not technical in nature. The issue is that the cable companies control the content and the pipe to the customers, and whatever solution Apple could bring to the table would replace everything the cable companies currently control (cable boxes, UI, remotes, DVR, PPV, etc.)

For this to happen, Apple would need to come up with a business proposal that would sufficiently benefit the cable companies (doesn't seem likely) or they'd have to come up with a very clever way to circumvent them entirely.

I'll take a swing at it.

1) Apple licenses with TV makers to offer "TV + iCloud" TVs to vendors. This opens up Apple's potential market to multiple companies, with multiple panel ties and even more sizes without the need for them to carry a single one in their relatively small stores.

2) Apple licenses with TV makers to offer ""TV + iCloud"-compatible devices to vendors. TV run the same way you'd expect them to, with all their standard I/O and UIs, but have a special I/O for a simple plug-in AppleTC device that will allow the TV to use that for its UI and attach to the back of the TV (even connecting to it's IR sensor).

3) Apple creates a new AppleTV to sell in their storers that exceeds $99 in price. Something along the lines of what a cable box or HD TiVo sells for at full price. THis new box is the receiver of all your other devices with all their HDMI, Coax, and optical cables going into the back of this device. THe TV is just a dumb monitor, set to HDMI and all other switching between your TiVo, Cable (which .can use a cable card that is plugged into this AppleTV), and Blu-ray player are all switched from the AppleTV interface, not the TV.

Are those enough ideas?

First off content isn't necessarily high margin, in fact by Apple's standards it's low margin. The existing iTunes business exists to sell devices, not the other way around. An Apple TV card introduces the same issues that made the ROKR a failure, no connection to the consumer and no control over the experience.

The existing Apple TV doesn't exist in order to sell content really, it exists to round out the platform ecosystem.

Yeah, sure. Those are great ideas, and I'd buy at least one of those variations, and seem like logical extensions of the Apple TV model. But they don't involve Apple manufacturing and selling big flat panels of glass that hang on your living room wall. I thought that was what folks were talking about with an Apple HDTV.

What if they just added the AppleTV hardware to the inside of the monitor they already make now? It already has a better picture and far, far better sound than any of the plasma TVs I've been looking over this week. If it was 42" instead of 27" it would be a no brainer and exactly what I'm looking for and Apple would still be making a healthy margin. They could also advertise it as an "all-in-one" in that you wouldn't have to buy a stereo and speakers to make the thing useful.

A decent 42" flatscreen plasma is currently 1500 or 2000 in my area and this monitor is just over a thousand. If they could make the screen bigger and only increase the price by 50% it would be right in the ballpark of the TVs I've been looking at, be far better quality, and still Apple would have a good margin.

I'm not sure they are going to do this at all and if I had to bet I would bet they don't get into TVs but I think it's far more likely and more possible than you are willing to admit perhaps.

Those are good, but here's my favorite:

4) Apple creates two models: 42" with AppleTV+CableCard+500GB disk for $1699. 50" with AppleTV+CableCard+2TB drive for $1999. Styling reminiscent of the iMac.

Screw the coax in the back and you're done. iPod/iPhone/iPad remote + HDMI out to your sound system + HDMI inputs for your Blu-Ray and game console if needed.

With the rumors of Apple offering 1080p video in iTunes, it does seem logical that such a move would support things like a Retina Display iPad+, a new apple TV 3 and an Apple-branded LCD television.

I was one of the one's who believed Apple would never move from PPC to Intel. People said Apple would lose its shirt trying to compete in the MP3 player business. People said Apple was stupid for entering the handset business and would fail miserably against the likes of Nokia, RIM, and Motorola. The iPad was denigrated as a giant iPod that no one would buy.

I have learned a very good lesson. NEVER try to predict what Apple will do and NEVER underestimate their ability to transform a market once they dive in. It seems inevitable that intelligent TVs are coming sooner rather than later. Right now there are baby steps but once Apple takes a shot at it all hell will break loose.

But why would anyone pay $1,899 for a 27" TV when they can grab one for $299 and an Apple TV for $99?

Why stop at $1900? You can invent even more ridiculous strawmen if you try - I know you have it in you. Go on, try it with $2000.

Agreed. I've not seen a cable or satellite box that has a good UI.


One thing I do is have a stereo amp connected to my TV's audio output jacks. It doesn't have a tuner, switcher or remote. I bought a class-T amp on eBay for $25 and its core chip is what does the magic in terms of inexpensive, quality sound.


The displays out there are usually good, but the sound, remotes and UI of pretty much every TV out there is rubbish. Maybe the look of TV enclosures could use some help, but I don't consider that to be a major issue.


I agree, the cheap handle, expensive razor model isn't what Apple does with media. It's the other way around from the perspective of iDevice vs. iTunes media.


Who said it was going to be a 27" TV? If people only wanted a 27" TV for that price, then you just get an iMac. Most proponents of a hypothetical Apple HDTV panel seem to be asking for something in the 50" range. Edit: OK, Mr. Peabody suggested that, but I think that suggestion is an outlier.

Good point. There may be no margins in the TV set business and I imagine there is very little money in the computer monitor business, yet Apple does well with the iMac.

Well, the $1,899 for a 27" is ridiculous and I know you are being facetious, but why would anybody spend $300.- and then a high monthly charge for a cell phone when you can get one for free?

I was taking someone else up on the suggestion that they'd shove Apple TV internals into a 27" Cinema Display casing.

For what prices do YOU think Apple would sell its sizes? Tell me them and then add $400 and you'd be near the real prices.


1. That doesn't have squat to do with what I said...
2. That's the basis for the arguments for smartphones: cheap phone, $70 a month plan. You're not getting the plan for free, just like you wouldn't be getting video content from iTunes for free with an integrated Apple HDTV.

1. Well it does...
2. I think you are entirely fixated on the hardware. Apple would OBVIOUSLY not be getting into the TV business to make money off dumb screens. These would be 'smart TVs' that will cost more. Like smartphones.
3. Apple would not get into the smartTV business without adding value. Added services will cost more but the entire package will be attractive.

Like smart phones...

Could Apple come out with a new display technology to give existing tech a kick in the pants? SED was very promising but hit legal and manufacturing problems; or maybe FED, or something like LaserVue? LCD and LED TVs throw a great picture at native resolutions, but they always seem "pixelly" to my eye.

IIRC, the "Retina Display" of the iPhone was a big leap forward in handheld resolution. Could Apple pull something similar in the living room? I'm not suggesting Apple pull their own amazing tech out of thin air. They have very smart people who can search for under-utilized tech and patents and join up with a manufacturing partner to give some obscure but superior technology the Apple spotlight.

Otherwise:
Yeah, the UI on a TV is used very little; no point in innovating there.
The UI on cable box/tuner could use a serious overhaul, but...
The cable companies and content providers control the bandwidth to the home. Like the cell phone carriers they have little incentive to innovate with their exclusive regional contracts and captive subscriber bases.

Steve is on the Disney BoD and Disney controls a lot of media (ESPN). If Steve could get Disney to work with Apple in some radical new delivery paradigm, that could help a lot.

Apple's other choice is broadband/Internet. But the cable companies are getting nervous in that arena too with talks of bandwidth caps, the "tiered" Internet and the like. I'd be nervous if my business model depended on delivering lots of bits to US subscribers (other countries have better high speed infrastructure than the US, see South Korea).

An Apple branded TV could drive people to iTunes. I think NetFlix is doing well with game console delivery, and the many other platforms it's available through.

Enough rambling.

- Jasen.

If they produced a really good mass market plasma screen that would be interesting - but somehow that seems implausible.

Maybe you want the Bose tv?

IMHO, I think this whole notion of entering the TV arena to be a non-starter. Think of it this way .... why would Apple limit themselves to just their brand of TVs when they already have a device that will enhance the user experience of existing TV's from all of the manufactures out there? .... and can be done a whole lot cheaper than replacing your TV every 3-5 years. Just keep on improving AppleTV and let the Sony's of the world fight it out between themselves for the TV.

This whole story is the result of some writer who has nothing of value to say .... but says it anyway. Oh well .... a slow news day, I guess.

I think many are expecting, but I like you just don't see it that a viable option so I instead posted what I think are three reasonable avenues Apple could take to dominate the home entertainment system.

I kinda like this one from LG for around $1500. Figure to add a soundbar tho, since as the Professor mentioned, great sound from any of the HDTV's built-in audio systems isn't very likely.

http://www.bestbuy.com/site/olspage....t=55LV5500+LED

http://www.lg.com/us/tv-audio-video/...v-55LV5500.jsp

BTW, CNET has a article on connected TV's and the market projections here:
http://news.cnet.com/8301-13506_3-10263463-17.html

Fascinating thread. A few thoughts:

1. For those who think Apple has shot its wad on computers, tabs and phones -- and that it's going to need a new product dimension to keep its growth going -- I emphatically disagree. I think the steepest growth curve over the next few years won't be hardware; it'll likely be the App Store, where Apple's margins are far greater than in any iDevice or laptop. IMO, The App Store, while already pretty damned successful, hasn't even begun to hit stride, particularly in the realm of desktop apps. When ubiquitous applications like MS Office, Adobe CS, etc etc start to appear on the App Store, there's going to be a LOT of room to grow, at a profitability point that will water our eyes. So there's that to think about. The newest, coolest hardware will always be a huge plank in Apple's business model, but I suspect third-party software is going to get very, very big in the next few years.

2. When these rumors about an Apple HDTV appeared a few months ago, I thought they were absolutely ludicrous. But now I'm not so sure. I take the point about margins, but agree with some posters that Apple can eke out decent profits if their industrial design is superior, their price point is robust, and their supply chain is insanely efficient. The UI question is a tougher one; it's hard to see how a primarily passive activity like TV watching is begging for a UI rethink. So I've moved to 50/50 on this one.

3. Maynard Um is a complete nub. Sadly, yet another example of a highly-paid 'analyst' on Wall Street who doesn't understand the first thing about what he's paid to analyze. He's focused on the bark on the trees, without realizing that there's a tree there, and a forest too. I'm reminded of a breakfast I had a few weeks ago, with another street analyst (at a very big bank) focused on online coupon companies. Google Offers had been announced the day before to much fanfare, and this boob hadn't even heard of it yet, nor stopped to think about how vulnerable Groupon is to Google's distribution. Man, I just about threw the guy out a window, it made me so disgusted. Oh, and Maynard -- take a thousand bucks from the millions you make, and find someone who can wrassle Photoshop Elements. What a nub.

4. Anyone know a great 42" LCD for under $800? It's the wife's birthday coming up, so, you know.

Folks have been yelling for Apple onsite for years. If they haven't done it by now they are likely too.

And in a way it makes sense. For years before Apple stores, the indie boys covered that need. Now with the growing number of stores many of them have lost a lot of business. So it is a fair move to let them keep onsite

You might want to pend some time watching stuff on those Lcds with the high refresh rate. I noticed from time to time (just in passing while at the store) that sometimes the picture looks funny. Film or tv will briefly look almost like live video. I don't know if that was from some extra process the tv was doing or is just a side effect of 120 mhz refresh but I found it oddly annoying.

I skipped the soundbar and went with a small 40 watt powered speaker set up. In my set up it looks unobtrusive and sounds good.
http://www.foundvalue.com/upload/ima...kers%20004.jpg
I also have a surround sound set up but never use it.

Back on topic, I think before/if Apple enters the Hdtv market we will first see them experiment more with the Atv. Most likely adding cable card/dvr functions. Once perfected then you would see them release some cool, killer integrated tv. Imho.