Piper: Mac mini with HDMI shows Apple's interest in selling HDTVs

Posted:
in General Discussion edited January 2014
Investment analysis firm Piper Jaffray believes that Apple's recently released Mac mini with an HDMI port is more evidence that the company intends to release an Internet-connected HDTV within 2 to 4 years.



Released last month, the new Mac mini with an HDMI port starts at $699 and allows easy connectivity to an HDTV. HDMI, or High-Definition Multimedia Interface, is a cabling standard intended for home theater, built on top of the computer-oriented DVI, or Digital Video Interface, specification.



Piper Jaffray analyst Gene Munster has long been convinced that Apple wants to get into the HDTV business, and he interpreted the introduction of the first Mac with an HDMI port as evidence that the Cupertino, Calif., company is continuing on that path. He still believes that Apple would introduce such a product within the next 2 to 4 years.



He also acknowledged that Apple Chief Executive Steve Jobs said last month that the Apple TV product remains a hobby because there isn't a viable market, due to the fact that existing set top boxes are heavily subsidized by cable operators. "That pretty much squashes any opportunity for innovation," Jobs said at the All Things D conference, "because nobody's willing to buy a set top box."



But Munster said he believes Apple could solve all of these hurdles with an Internet-connected, all-in-one Apple television.



"In the connected TV market software, content and portability would be key differentiators for Apple with a premium all-in-one solution (different than Apple TV or Mac mini)," he wrote. "The set top box and live TV content are the primary hurdles that remain."







Munster's solution sees Apple offering an Internet-based iTunes TV subscription for between $50 and $90 per month, effectively replacing a user's $85-per-month average cable bill and offering access to current and older episodes of select shows on select channels.



"Additionally, this hurdle could be solved with the addition of an App Store for the TV, offering apps like Hulu Plus (currently available for the iPhone and iPad) with current TV content through Hulu for $10/month," he said.



The Hulu Plus applications and premium service were launched this week, offering viewers the ability to watch every episode of every season of a number of shows from broadcast networks in the U.S. However, the CEO of Hulu has insisted that the service is not intended to replace a customer's cable subscription.







Munster believes Apple could be the savior of the TV business, where the average selling price of HDTVs and home entertainment has fallen by more than 50 percent. He believes a connected TV with a greater emphasis on software and Web content could lift the average selling prices of HDTVs. Apple, as a company experienced in marrying hardware and software, would be an ideal fit, he said.



"History shows that Apple can succeed by redefining mature markets (portable music, mobile phone)," he said. "Home entertainment systems aare combinations of an expensive HDTV, complicated A/V components, and a monthly service fee often with a total sticker price of $2,000+... We believe Apple is uniquely positioned to combine these elements and charge a premium ($2,000) for an Apple-branded television at a sticker price that would be competitive with most home entertainment systems."
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Comments

  • Reply 1 of 31
    moxommoxom Posts: 325member
    Hmm... this could be very interesting.



    As someone who works in the Audio/Visual field, I'd be very interested in seeing what Apple could come up with.



    There certainly is potential for Apple to own this space - it certainly would require something special.



    I look forward to see how things unfold...



  • Reply 2 of 31
    anantksundaramanantksundaram Posts: 18,405member
    See this blog in today's New York Times: http://bits.blogs.nytimes.com/2010/0...ving-room/?hpw
  • Reply 3 of 31
    thrangthrang Posts: 681member
    I suppose there's a segment of the marketplace that this might work for, but I think a vast majority of people are used to having access to a lot of different content, not just TV shows or movies. Until they figure out how to provide at least the same accessibility to real-time news, sports, weather, financial channels, etc, any offering in this space, even from Apple, will have a much narrower appeal than a cable set top box. Content is king, and right now, the cable and sat operators still can deliver a lot more than an Apple TV



    Perhaps if Apple built in some cable or sat tuning and sold it as a stand alone, customer purchased box like a TiVo or Moxi DVR...but then, you're back to the content and revenue stream being the operator and not apple (I know TiVo charges a monthly fee for their guide service, but last I heard, they are struggling to maintain the value add....)
  • Reply 4 of 31
    pxtpxt Posts: 683member
    I dont see any connection between Apple releasing the new Mini and the possibility of an Apple internet TV. I would imagine that a smart, internet HDTV from Apple might replace the need for an Apple TV, but you wouldn't want both, nor a smart TV and a Mini to buy as well, and so this analyst is making up a link to support a view he already has.



    I do think that the new Mini with its sleeker aluminum design and media-friendly HDMI connector means Apple want Minis in the home. My guess is they will now sit back for quite a while and see what people do, then decide whether to kill the Apple TV and how much to push the Mini in the home with new negotiated content or perhaps Tivo-like front end and ability to communicate with cable cards, or whatever is the result of this experiment.
  • Reply 5 of 31
    jeffharrisjeffharris Posts: 514member
    There's NO WAY Apple would EVER jump into a low-margin commodity business like selling television sets.

    Their strategy of selling devices that can connect to ANY HD television set 9or monitor) makes FAR more sense.



    Just look at one brand and see how many models they sell. That sort of strategy is so far from Apple's, it's ludicrous to entertain.



    When will these idiotic analysts figure that one out?

    It makes as much sense as Apple starting to make assault rifles. iKill?
  • Reply 6 of 31
    kibitzerkibitzer Posts: 1,113member
    Quote:
    Originally Posted by jeffharris View Post


    There's NO WAY Apple would EVER jump into a low-margin commodity business like selling television sets.

    Their strategy of selling devices that can connect to ANY HD television set 9or monitor) makes FAR more sense.



    Just look at one brand and see how many models they sell. That sort of strategy is so far from Apple's, it's ludicrous to entertain.



    When will these idiotic analysts figure that one out?

    It makes as much sense as Apple starting to make assault rifles. iKill?



    A reasonable argument with one exception: Apple's unit would have the proprietary feature of seamless integration into households' Apple ecosystems. That would command a premium with a niche market segment.
  • Reply 7 of 31
    jeffharrisjeffharris Posts: 514member
    Quote:
    Originally Posted by Kibitzer View Post


    A reasonable argument with one exception: Apple's unit would have the proprietary feature of seamless integration into households' Apple ecosystems. That would command a premium with a niche market segment.



    I just don't see it.



    What size HDTV? 32"? 36"? 40"? 46"? 50"? 52" 60"? 65"? Apple doesn't WANT to sell a full array of products. If that were the case, we'd have a mid-sized headless Mac somewhere between the Mac mini and Mac Pro.



    If I buy a Mac mini, I can attach it on the back of my HDTV mounting arm. If I upgrade the TV, the mini stays in place.
  • Reply 8 of 31
    kibitzerkibitzer Posts: 1,113member
    Quote:
    Originally Posted by thrang View Post


    I suppose there's a segment of the marketplace that this might work for, but I think a vast majority of people are used to having access to a lot of different content, not just TV shows or movies. Until they figure out how to provide at least the same accessibility to real-time news, sports, weather, financial channels, etc, any offering in this space, even from Apple, will have a much narrower appeal than a cable set top box. Content is king, and right now, the cable and sat operators still can deliver a lot more than an Apple TV



    Perhaps if Apple built in some cable or sat tuning and sold it as a stand alone, customer purchased box like a TiVo or Moxi DVR...but then, you're back to the content and revenue stream being the operator and not apple (I know TiVo charges a monthly fee for their guide service, but last I heard, they are struggling to maintain the value add....)



    The chief obstacle isn't technology. The content owners and the content distributors (increasingly one and the same, such as Comcast's buy-in to NBC Universal) are fearful of surrendering their stranglehold over future revenue streams and profits. The Comcasts of the world are truly the biggest restraint-of-trade scandal of the information universe.
  • Reply 9 of 31
    dagamer34dagamer34 Posts: 494member
    Last I checked, you needed to sell HDTVs to get into the HDTV business, and it's really not such an amazing business to be in. To get the type of margins Apple is use to seeing, TVs would need to cost $3000+. I don't know about you, but there aren't a ton of fanboys who can so quickly throw down THAT kind of cash.



    Besides, who's going to make the TVs themselves? Apple?
  • Reply 10 of 31
    kibitzerkibitzer Posts: 1,113member
    Quote:
    Originally Posted by jeffharris View Post


    I just don't see it.



    What size HDTV? 32"? 36"? 40"? 46"? 50"? 52" 60"? 65"? Apple doesn't WANT to sell a full array of products. If that were the case, we'd have a mid-sized headless Mac somewhere between the Mac mini and Mac Pro.



    If I buy a Mac mini, I can attach it on the back of my HDTV mounting arm. If I upgrade the TV, the mini stays in place.



    That's a good point. In your concept, then - (to paraphrase Tolkien) "one box to rule them all."
  • Reply 11 of 31
    wigginwiggin Posts: 2,258member
    This is the most nonsensical analysis I've read in some time. How, exactly, will an Apple HDTV solve Apple's content problems? And even with all of Apple's high consumer sentiment, there is no way that is strong enough to get people to pay that high of a premium to get a TV by Apple. If Apple's content offerings were that great, people would already be buying AppleTV and simply adding it to the TVs they already have.
  • Reply 12 of 31
    sdh5019sdh5019 Posts: 4member
    The one problem with this concept is that Cable providers also are the primary broadband providers in most areas. Therefore, as soon as people start dropping their cable subscriptions, the cable companies will just make internet costs more and decrease cable prices. I'm surprised they haven't done it already. Ultimately, they control all the content coming into your house, either through cable or internet, and they're not going to let Apple take away half their business through their own pipes.



    Sorry guys, the only people that can revolutionize TV are current cable providers.
  • Reply 13 of 31
    Apple may or may not be contemplating an HDTV but would hardly consider the Mini's HDMI port any kind of sign. Many motherboards come with a HDMI port now. I belive most, if not all, of Intel's media series motherboards have a HDMI port.



    This is more a sign of the times than any intention on Apple's part. Full media experience has been a growing trend for some time and HDMI has reached the point that computer vendors are seeing value in adding.
  • Reply 14 of 31
    antkm1antkm1 Posts: 1,441member
    The TV and Home Entertainment hardware industry is to flexible on price than i believe Apple is willing to compete with. Look at the prices of HDTV's since 2005. I bought a 37" flat panel HDTV in 2005 for $2300. Today you can buy one almost identical, save for some updated features like internet access, Netflix, Hulu, YouTube, etc built-in. It can cost you around 50-70% of the 2005 figures.



    Now, looking at the History of how Apple prices it's devices, I just don't see the same flexibility. Apple's Hardware (save for the iPod and iPhone) have been relatively stable in the last 5 years. The iMac, MacBooks have all been priced at a point where they have gone down a little, but not 50%. The home entertainment hardware industry is way too cut-throat on price for Apple. Granted this is a company that primarily caters to the upper echelon markets, but with the invention of the iPod and the iPhone, that has changed slightly.



    Personally, i'd rather see Apple tackle the HT STB first before diving into TV's. If they charged $2000 for a TV that replaved all our components, it would have to be pretty darn compelling. There are too many video/audio-philes out there (even in the base market) that would not buy into this. Look at Bose. They have tried over the past 20 years to simplify the Home theater down to it's basic components, not without a struggle, and even now their product still don't sell the kind of numbers that Apple would need to stay competitive in this market.



    Think of all the different technologies Apple would have to invest in to make a quality product. Blu-ray (which SJ has been known to frown on physical media), Surround Sound receiver and amplification technology, TV HD tuner technology, etc. That's a lot of junk under the hood, and i'm not sure how willing Ives and Jobs are to play with all these different technologies. Plus, like computers, the monitor is the last thing that ever needs to be replaced. A STB is much more likely. I could see an STB, like what Sony and Bose are trying to market (with relative degrees of success).



    Show me a STB that replaced my Cable, Blu-ray, Surrond sound revicer and Game Console (which i own non becase my computer works better for that), and i would be curious, but not 100% convinced.
  • Reply 15 of 31
    jamiecjamiec Posts: 42member
    There's a clue here in what Jobs said about set-top boxes being heavily subsidized.



    My guess is that the real plan is to become the exclusive set-top box provider for one of the big cable/satellite companies. They pay dearly to have Apple develop and manufacture a slick box with DVR that's tied exclusively to that provider for 2+ years.



    Apple gets that sweetheart subsidy deal, and millions of people switch to that provider just for the interface.
  • Reply 16 of 31
    jragostajragosta Posts: 10,473member
    Piper Jaffrey is full of idiots.



    If Apple were going to sell HDTVs, they would have released the Mini with some proprietary slot that would tie the Mini to the Apple TV.
  • Reply 17 of 31
    solipsismsolipsism Posts: 25,726member
    Ugh! This dumb idea is still getting floated around?
  • Reply 18 of 31
    amador_oamador_o Posts: 67member
    I still remember this article...



    http://www.appleinsider.com/articles...ise_ships.html



    What ever happened with this interface?
  • Reply 19 of 31
    antkm1antkm1 Posts: 1,441member
    Quote:
    Originally Posted by jamiec View Post


    There's a clue here in what Jobs said about set-top boxes being heavily subsidized.



    My guess is that the real plan is to become the exclusive set-top box provider for one of the big cable/satellite companies. They pay dearly to have Apple develop and manufacture a slick box with DVR that's tied exclusively to that provider for 2+ years.



    Apple gets that sweetheart subsidy deal, and millions of people switch to that provider just for the interface.



    I said this in another post (tried looking for it but i guess i have to re-type it). With Apple's current relationship with ATT as it stands today. I could easily see Apple partnering with ATT's U-Verse Cable group to produce a product that is subsidized through ATT and Apple does the rest. The UI, the App/iTunes Store, iOS4 (or whatever the current release is), A DVR that works with the UI and U-Verse. It seems like a very plausible scenario. Just like the iPhone, Apple would use it's own UI to do TV, like the YouTube app you'd have your Cable TV App.



    But, one big hurdle would have to be overcome:



    1. Pay-per-view. ATT and other cable companies rely pretty heavily on PPV TV programming, and the iTunes Store would take a big chunck out of that with Rentals, the Hulu and Netflix Apps as well.



    But still, i think this is VERY plausible...
  • Reply 20 of 31
    antkm1antkm1 Posts: 1,441member
    Quote:
    Originally Posted by jeffharris View Post


    I just don't see it.



    What size HDTV? 32"? 36"? 40"? 46"? 50"? 52" 60"? 65"? Apple doesn't WANT to sell a full array of products. If that were the case, we'd have a mid-sized headless Mac somewhere between the Mac mini and Mac Pro.



    If I buy a Mac mini, I can attach it on the back of my HDTV mounting arm. If I upgrade the TV, the mini stays in place.



    you can read my other posts above, but i agree. It's more plausible to do a STB. The Apple Displays come in 3 sizes small, medium and XL. I don't see Apple doing a display.
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