47% of consumers interested in Apple television, willing to pay 20% premium

Posted:
in iPod + iTunes + AppleTV edited January 2014
A new survey has found consumers are extremely interested in the prospect of an Apple-branded television, and are willing to pay a 20 percent premium over existing TV prices for such a device.

Morgan Stanley


The survey, by AlphaWise and Morgan Stanley, polled 1,568 heads of U.S. households regarding the "smart TV" market. It found that just 18 percent of homes have a smart TV, while 13 percent of respondents said they didn't know whether their TV is considered "smart."

The poll shows that those who own smart TVs connected to the Internet actually spend less time accessing Internet content through their TV than those who do not own a smart TV.

"This suggests that Smart TVs currently available on the market do not offer easy-to-use software to integrate Internet content into users' TV experience," analyst Katy Huberty said.

Based on this, she believes that the survey shows Apple has a strong opportunity to disrupt the TV market, similar to how the iPhone made Internet consumption via a handset relevant.

The survey found that 11 percent of respondents said they would be "extremely interested" in purchasing a so-called "iTV" from Apple, while 36 percent said they are "somewhat interested." The name was used in the survey to avoid confusion with the current Apple TV set-top box.

Morgan Stanley


The fact that 47 percent said they are "interested" in an Apple television has made Huberty particularly bullish on the prospect of such a device. She noted that 23 percent of consumers said they were interested in purchasing an iPhone in a February 2007 survey, while 21 percent of respondents said they wanted to buy an iPad in April of 2010.

With 11 percent "extremely interested" in an Apple television, that would translate to over 13 million potential units sold in the U.S. And another 36 percent "somewhat interested" would be an incremental 43 million units.

The potential sales suggest only one Apple "iTV" per household, but the AlphaWise and Morgan Stanley survey found that the average home has 2.8 televisions, and 14 percent of respondents said they would consider replacing "all" of their TVs with Apple's hypothetical product, while 9 percent said they could replace "most."

And respondents also signaled they are willing to pay a premium for an Apple television: 46 percent said they are willing to pay over $1,000, while 10 percent are willing to pay over $2,000.

On average, respondents said they would pay $1,060 for an "iTV," which is a 20 percent premium over the $884 paid for the current average television set. Respondents ages 18 to 29 showed the most willingness to invest in an Apple television, indicating they would pay a 32 percent premium for such a device.

iMac


Among potential hardware features, respondents said they are most interested in high screen quality from an Apple television. As for the software, consumers were mostly interested in the device being easy to use, particularly when searching for content.

Huberty has concluded that Apple's strategy could focus less on content and more on the operating system of a potential television set. She believes if the company were to deliver a strong experience with search, ease of use, and control, it could differentiate from current sets on the market.

Buzz about an Apple television set picked up last week when the company's chief executive, Tim Cook, said in an interview with NBC that he feels current televisions are outdated pieces of technology.

"When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years," Cook told Brian Williams on Rock Center. "It's an area of intense interest. I can't say more than that."

Rumors have an Apple television set have persisted for years, but the possibility of an enhanced Apple TV set-top box with cable connectivity cropped up this August. A report from The Wall Street Journal revealed Apple has considered building its own cable box that would include an iOS-like user interface and advanced cloud-based DVR functionality that would blur the line between live and on-demand content.
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Comments

  • Reply 1 of 81
    I guess I am in the majority as I WON"T pay a premium for an Apple tv. I have a Mac Book Pro and a Mini, so why do I need an new tv? Just because it has the Apple logo? NO. I watch tv for tv's sake and none other. My 62" Samsung is getting a little long in the tooth, but I still gets wonderful 1080P images out of it, so why bother.
  • Reply 2 of 81
    rogifanrogifan Posts: 10,669member
    How do Samsung and Google smart TV's work? Are users forced to upgrade their TV to get the latest and greatest software or could they have a TV for 5+ years and still get all the "smart" benefits from it?
  • Reply 3 of 81
    gatorguygatorguy Posts: 21,225member


    Seems like a silly survey if an Apple TV isn't defined.

  • Reply 4 of 81

    Quote:


    A report from The Wall Street Journal revealed Apple has considered building its own cable box that would include an iOS-like user interface and advanced cloud-based DVR functionality that would blur the line between live and on-demand content.



     


    Well.  I hope they take their time to get it right.  I don't watch that much T.V these days.  


     


    I have a 50 inch Panasonic, Sky Box Package with phone, channels galore and internet for £24 a month.  I don't see how Apple are going to do it.


     


    They have 120 Billion in the bank.  How serious are they about a market that isn't making money on the actual sets.  Though Apple will no doubt charge a premium...on any such set.  Mythical as it now is.  It would be wonderful to throw out the entire nest of Sky Box, PS3, TV wires, AtV box etc and just have one box to rule them all controlled by an iPad/pod/phone/nano remote...with Siri and gestures.


     


    To me it's about services.  Content.  Programmes (limited access).  Games (they have the app store).  Internet. (they have that and iCloud)  Facetime. (they have that...)


     


    Those they can deliver bar universal programming.  Unless they bought out Disney and WBs.  But they had their chance when Apple was at $700 to become agressive with a large acquisition.


     


    I think Apple will do TV like they did 'games'.  THey'll almost fall into by accident.  Letting the pieces fall into place and jump.  But not quite.  It seems they're actually keeping their eye on the ball with this one.  It's not the same as iTunes and the iPod.  Hollywood and TV moguls have seen Apple gain power in music and they'll want a bigger cut and to keep most power.


     


    How Apple gets around that?  Leave the negotiations to Eddy, I guess.  I see Stalemate.


     


    Apple are like the Sony of the 21st Century.  I guess the 'TV' is the only jewel left from the Apple Crown and the circle will be complete (unless you're Dave and want an X-Mac...)


     


    Lemon Bon Bon.

  • Reply 5 of 81
    1. Strange that fewer people access the internet who have a 'smart TV' than the ones who don't own (that crap; I have it and don't use it as I find it to be...crap)

    2. I belong to that 10% of people who pay over $2000 even though I don't watch that much TV. Actually non, only movies or a good series (to me: Sopranos, The Wire, Boardwalk Empire). So although it's not turned on every day, I do see the darn black thing in the living room and will buy B&O again if Apple doesn't create a TV set. Something I cannot phantom, but ok.

    3. I seriously hope Apple will look at the prospect of a TV set on a global scale and not limit it to US only. Meaning they will need to think of subtitles, countries that are government funded as opposed to ad revenue and other local things like that.
  • Reply 6 of 81


    Apple has lost my vote of confidence stemming from their foulups lately with software and some hardware blunders.  I would like to think this new IP would focus on quality, but as Apple has demonstrated on their computer lineup, margin seems to be trumping that interest.  I also just upgraded to two new 65" LCD TVs that are the flagship models in their line.  I chose a TV for the panel quality, panel capability, and other assorted features.  


     


    What I won't do is buy a TV because it has an Apple logo on it.  The set would likely be edge lit, have banding issues in the larger sizes, or Apple simply wouldn't offer a set in a size large enough for many home theater systems.  Instead, a cable type like box that has connected features and DLNA built in would be much more of interest and marketable.  You can store it more easily, it fits the subsidizing model the iPhone has, and you can utilize iOS devices that are already flooding the market to control it.  




    If Apple produces a actual panel, I think it will be a mistake.  

  • Reply 7 of 81
    So if users are willing to pay a 20% premium then it means Apple could enjoy a 25% margin on their TV vs 5% everyone else is getting.
  • Reply 8 of 81
    So if users are willing to pay a 20% premium then it means Apple could enjoy a 25% margin on their TV vs 5% everyone else is getting.

    I don't think that is how this works. Apple uses quality components to create their products, resulting in top notch stuff. Competition tries to make things cheap because they don't understand why people would pay for quality and therefor use inferior components. Resulting in crap products, but getting bigger market share because not everyone can afford more expensive products.

    In the long run however, things might actually be cheaper if you buy premium over cheap.
  • Reply 9 of 81
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by Rogifan View Post



    How do Samsung and Google smart TV's work? Are users forced to upgrade their TV to get the latest and greatest software or could they have a TV for 5+ years and still get all the "smart" benefits from it?


     


    I have a Samsung smart TV. I've yet to see an OS update but the apps are updated very frequency. It suffers from Playstation 3 syndrome though - the updates are too regular. Waiting for it to update when all I want to do is watch BBC iPlayer is very annoying!

  • Reply 10 of 81
    irelandireland Posts: 17,684member

    Quote:

    Originally Posted by massconn72 View Post



    I guess I am in the majority as I WON"T pay a premium for an Apple TV.


     


    Like the majority of phones sold worldwide not being an iPhone? 91%. interesting.

  • Reply 11 of 81
    irelandireland Posts: 17,684member

    Quote:

    Originally Posted by Lemon Bon Bon. View Post


     


    Well.  I hope they take their time to get it right.  I don't watch that much T.V these days.  


     


    I have a 50 inch Panasonic, Sky Box Package with phone, channels galore and internet for £24 a month.  I don't see how Apple are going to do it.


     


    They have 120 Billion in the bank.  How serious are they about a market that isn't making money on the actual sets.  Though Apple will no doubt charge a premium...on any such set.  Mythical as it now is.  It would be wonderful to throw out the entire nest of Sky Box, PS3, TV wires, AtV box etc and just have one box to rule them all controlled by an iPad/pod/phone/nano remote...with Siri and gestures.


     


    To me it's about services.  Content.  Programmes (limited access).  Games (they have the app store).  Internet. (they have that and iCloud)  Facetime. (they have that...)


     


    Those they can deliver bar universal programming.  Unless they bought out Disney and WBs.  But they had their chance when Apple was at $700 to become agressive with a large acquisition.


     


    I think Apple will do TV like they did 'games'.  THey'll almost fall into by accident.  Letting the pieces fall into place and jump.  But not quite.  It seems they're actually keeping their eye on the ball with this one.  It's not the same as iTunes and the iPod.  Hollywood and TV moguls have seen Apple gain power in music and they'll want a bigger cut and to keep most power.


     


    How Apple gets around that?  Leave the negotiations to Eddy, I guess.  I see Stalemate.


     


    Apple are like the Sony of the 21st Century.  I guess the 'TV' is the only jewel left from the Apple Crown and the circle will be complete (unless you're Dave and want an X-Mac...)


     


    Lemon Bon Bon.



     


    Good post. Pretty much says it all.

  • Reply 12 of 81
    haarhaar Posts: 563member
    20% premium over which sets?... the average set price at walmart ?... if so then, as usual, Customers are being disingenuous. (20% more on a cheap set, is still a cheap set)

    the iPad is the state-of-the-art tablet in both price and features, but in the tv market you only get one or the other...and every one wants SOTA at cheap prices


    SONY (perhaps Panasonic too) is a brand that is over all a quality brand.
    SONY still is if you consister a 25000 dollar, 4k resolution, 84inch tv set. (and "includes" free 4k movies LOL)

    my point is DO NOT think that apple is going to introduce a "cheap" set ... NOTHING apple does is cheap.


    the late Steve Jobs loved SONY products, so expect the price of APPLE sets to be in line with SONY's top sets. Meaning apple will be providing a similiar experience, if not better than SONY at the SAME price. (which means Apple will not be completing on price with Sony... siblings if you will... )

    SHARP makes the best super sized sets. IMO (70 inches and larger) they also other make the best LCD set (the elite line but guess what it is priced at ... an insane 5000 dollars)

    I dont expect APPLE to charge 5000 dollars for their TV set, but we may find out that compared to Sharp you will be giving up about 20" inches for the Apple set... (80" Sharp, 4500 dollars which will be 55" Apple set,
    70" Sharp 2700 dollars which will be a 50" Apple Set.
    60" Sharp (too cheap, but for this Comparison ) 1600 dollars, a 46" Apple set)

    (personally i "lust" after the 80" set, the first set where one needs to step back while watching it at the store... oh SO big!! LOL if it was not true.

    APPLE makes products akin to the XBR line of TV sets...
  • Reply 13 of 81
    paxmanpaxman Posts: 4,615member


    97% of car owners would be interested in a Porsche (and 47% would be willing to pay a 20% premium). Only 1% of car owners currently own a Porsche, Ferrari or Aston Martin. 1% of the 1% have no idea if their car is a Porsche, Ferrari or Aston Martin. 

  • Reply 14 of 81
    kevtkevt Posts: 195member

    Quote:

    Originally Posted by PhilBoogie View Post





    I don't think that is how this works. Apple uses quality components to create their products, resulting in top notch stuff. Competition tries to make things cheap because they don't understand why people would pay for quality and therefor use inferior components. Resulting in crap products, but getting bigger market share because not everyone can afford more expensive products.

    In the long run however, things might actually be cheaper if you buy premium over cheap.


     


    That's right. Nobody else in the entire world apart from Apple understands that people will pay more for a higher quality products.


     


    Shhhh, not so loud!


     


    You don't want anybody else to twig on to this and start using higher quality components manufactured by ...

  • Reply 15 of 81
    irelandireland Posts: 17,684member

    Quote:

    Originally Posted by RichL View Post


     


    I have a Samsung smart TV. I've yet to see an OS update but the apps are updated very frequency. It suffers from Playstation 3 syndrome though - the updates are too regular. Waiting for it to update when all I want to do is watch BBC iPlayer is very annoying!



     


    Hence Apple usually tends to wait until they've the product more perfected before shipping. I feel your pain bro, PS3 user here.

  • Reply 16 of 81
    kevtkevt Posts: 195member

    Quote:

    Originally Posted by haar View Post



    20% premium over which sets?... the average set price at walmart ?... if so then, as usual, Customers are being disingenuous. (20% more on a cheap set, is still a cheap set)

    the iPad is the state-of-the-art tablet in both price and features, but in the tv market you only get one or the other...and every one wants SOTA at cheap prices

    SONY (perhaps Panasonic too) is a brand that is over all a quality brand.

    SONY still is if you consister a 25000 dollar, 4k resolution, 84inch tv set. (and "includes" free 4k movies LOL)

    my point is DO NOT think that apple is going to introduce a "cheap" set ... NOTHING apple does is cheap.

    the late Steve Jobs loved SONY products, so expect the price of APPLE sets to be in line with SONY's top sets. Meaning apple will be providing a similiar experience, if not better than SONY at the SAME price. (which means Apple will not be completing on price with Sony... siblings if you will... )

    SHARP makes the best super sized sets. IMO (70 inches and larger) they also other make the best LCD set (the elite line but guess what it is priced at ... an insane 5000 dollars)

    I dont expect APPLE to charge 5000 dollars for their TV set, but we may find out that compared to Sharp you will be giving up about 20" inches for the Apple set... (80" Sharp, 4500 dollars which will be 55" Apple set,

    70" Sharp 2700 dollars which will be a 50" Apple Set.

    60" Sharp (too cheap, but for this Comparison ) 1600 dollars, a 46" Apple set)

    (personally i "lust" after the 80" set, the first set where one needs to step back while watching it at the store... oh SO big!! LOL if it was not true.

    APPLE makes products akin to the XBR line of TV sets...


     


    This isn't universally true though, is it.


     


    As much as I love my iPad mini, a glance at the screen shows you it's anything but 'state of the art'.

  • Reply 17 of 81
    "The poll shows that those who own smart TVs connected to the Internet actually spend less time accessing Internet content through their TV than those who do not own a smart TV."

    It seems this quote needs more explanation. If those who don't own a smartTV are accessing internet content through their TV more frequently than those with a smartTV that tells me some other device is in play. It would be nice if they dug a bit on this and discovered the prevalence of AppleTVs, Rokus, and the like. It seems consumers don't mind running their whole interface through a box if it gives them the content they are seeking.
  • Reply 18 of 81
    antkm1antkm1 Posts: 1,441member

    Quote:

    Originally Posted by AppleInsider View Post


    Respondents ages 18 to 29 showed the most willingness to invest in an Apple television, indicating they would pay a 32 percent premium for such a device.


    I have to laugh at this.


    So people ages 18-29 would pay a 32% mark-up on a TV from Apple.


     


    OK, so what is their household income?  And what do they do for a living?


    My guess is there are a couple reasons why this is:


     



    • They aren't going to be the one's paying for it (still living off Mom & Dad)


    • They are very well off, considering the latter half of that age bracket would only be 3-5 years out of college.


    • They don't have any concept of a household budget yet and will just "charge it".


     


    So I don't even look at those number because they are unrealistic.  Look at the next age bracket and how much less the interest in paying a "premium" is.  That is much more realistic in my mind.


     


    Did they also ask "how old is your current TV set"?  That would be a very interesting figure to have.

  • Reply 19 of 81


    I call bullshyt.


     


    People arent going to pay more for an AppleTV, just to pay more for an AppleTV.  Its going to have to do something clearly better to be successful.  The main reason Apple products are so popular are due to word of mouth, most of us started using Apple products for the same reason.  We had some friend who has a cool looking Apple product and who either A) shows us some cool stuff it can do or B) tells us about the awesome experience.


     


    Theres simply nothing awesome about a $2000 50" flatscreen with an Apple logo on it.  Because there are plenty of awesome looking $500-1000 50" flatscreens that work perfectly well and dont suffer from issues that Windows computers & non-Apple smartphones/tablets did.  This isnt Mac vs PC, where people are concerned about stability & viruses.  This isnt iPhone/iPad vs. Android where people are concerned about battery life, apps and build quality.  


     


    This is TV.  I dont have to explain to my 65 year old mom how to use a TV, unlike a smartphone/laptop/tablet.. TV is something she's used all her life.  For Apple to be successful they need a completely out of the box idea for how tv WORKS.. not just how it looks.  GoogleTV tried that, but it was too clunky, cumbersome and technical to use.  


     


    Apple needs an easy to use interface, that noone else has thought of.  And it needs to have features noone else has been able to bring to the market.  A killer feature like being able to watch any program, from any date/time whenever you want.  Imagine all of your TV programming being either DVR or On Demand.  HBOGo comes close, but its just HBO material.  If Apple can take that concept and make it work for every major channel.. all in one place on the same tv.. then people will buy it like crazy.

  • Reply 20 of 81
    antkm1antkm1 Posts: 1,441member

    Quote:

    Originally Posted by Tokolosh View Post



    "The poll shows that those who own smart TVs connected to the Internet actually spend less time accessing Internet content through their TV than those who do not own a smart TV."

    It seems this quote needs more explanation. If those who don't own a smartTV are accessing internet content through their TV more frequently than those with a smartTV that tells me some other device is in play. It would be nice if they dug a bit on this and discovered the prevalence of AppleTVs, Rokus, and the like. It seems consumers don't mind running their whole interface through a box if it gives them the content they are seeking.


    right, and it could also mean that they already had a STB with streaming content before getting a "smart" TV.  Or just that they use some other device...Tablet, Smart phone, Game console, BD player?  The latter two have had internet based feature much longer than TVs.

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