Analyst: Apple to debut TV set in December

Analyst: Apple to debut TV set in December

Summary: "We believe Apple could ultimately capture 10 percent of the market within 1-3 years after launch".


Another day, and another analyst pontificates about the mythical Apple TV.

Today it's the turn of Piper Jaffray analyst Gene Munster to gaze into his crystal ball. If you're thinking of buying a TV but are interested in what Apple might have to offer, then you might want to wait, because Munster believes that Apple could unveil its much-anticipated TV in December, and have it ready to ship early in the new year.

In a research note, Munster outlines that any TV that Apple sells will retail for between $1,500 and $2,000 and come in a range of sizes, from 42-inch all the way up to 55-inch. A quick scan of Best Buy's website suggests that smart TVs in this screen size tend to retail for between $800 and $1,700, which means that -- if Munster's information is correct -- consumers would be paying quite a premium for the privilege of owning a TV with the Apple logo on it.

Munster doesn't believe that price is a problem though, pointing out that Bang & Olufsen will start selling a 40-inch V1 TV next month that will retail for $3,700.

By announcing the TV in December, Munster believes that Apple would "freeze the market" for those consumers in the market for a new TV and create pent-up demand for the product ahead of its launch.

According to Munster, it will be possible to control the Apple TV using an iPhone or iPad, and it may feature the Siri voice-control technology and have access to Apple's App Store.

"We believe Apple could ultimately capture 10 percent of the market within 1-3 years after launch," writes Munster.

Munster has been talking about an Apple TV now for more than four years now. He confidently predicted that a standalone Apple TV would be available in 2011. He also predicted that Apple would sell 6.6 million Apple TV set-top boxes in 2009 when in truth by 2011 Apple was barely selling 3 million units.

On Thursday, James McQuivey, vice president and principal analyst at Forrester, blogged about how he believed that the best way for the Cupertino-based giant to break into the dwindling market was by 'thinking outside the box' and manufacture the "world's first non-TV TV".

This non-TV TV, which he called the iHub, would feature a 32-inch screen with touch, gesture, voice, and iPad control and could be hung on the wall wherever the family congregates for planning, talking, or eating. McQuivey believes that the key to success is not content, but apps.

What no one seems to be addressing is where's the market for these overpriced Apple TVs? There seems to be an incredible amount of rabid Apple fanboyism surrounding these rumors that assumes that people will buy anything that Apple makes, at whatever price point that Apple decides. In which case, why isn't the iPad an $1,000 device, and how come Apple is having a hard time penetrating into the living room with the existing Apple TV set-top box?

Another problem with these Apple TV rumors is that they all fail to address how the TV will differ from the set-top box, or what the set-top box could be configured to do via a software update. It seems to be that the only advantage a TV would offer over a device that connects to any HDMI-capable TV set is that people wouldn't need to figure out where that HDMI cable plugs in.

Now how much would you be willing to pay for that?


Topic: Apple

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  • Gene Munster is not any better then any other analyst

    the fact that he is referenced as much is curious. Is he really predicting that an Apple TV is in the future, or trying to raise interest in their stock?

    As we know, this would create a demand for the stock, which will also help raise the share price, beneficial to those that wish to sell some in the near future.

    I am always suspect of any anaylst, in refernce to any company.
    Tim Cook
    • Suspicion is Good

      Just don't let it block you from accepting an observation or comment that challenges your opinions by bringing in new facts or perspectives.

      I buy a lot of Apple things. I also stopped having a television a couple of years back. Let's assume that all Apple forays into a new sector begin with the approval and dollars from the faithful. Would I get the MunsterTV? (No, not Fred Gwynn and Al Lewis 24 hours a day, but Munster's hypothetical big screen with embedded AppleTV box, a camera for FaceTime, and a related app store.) No. The things I would want I already have. The rest is stuff that means nothing to me. I recognize that I am an outlier. Community (bought as a season pass) is my favorite tv show, yaknowwhatimean?

      Munster's analyses always hand-wave the question about where Apple is to make the margins to justify its focus and time.

      As to your stock demand point, I think analysts are trying to generate trades, so buy and sell recommendations are equally effective. (Trades on Wall Street motivated by an analyst's recommendation are between someone who believes and someone who believes the analyst is more wrong than polka dots on a tuxedo.)

      The tv screen is the terminal point of one of entertainment's pipelines. All along the way down the pipe, contracts between upstream and downstream junctions dictate the cost to open the valve and how long the valve stays open. Another screen that can also do the job of a computer seems insufficiently disruptive, because the transactions for rights among intermediaries are the signifying element of why we can or cannot see what we want.

      Some have suggested an app scheme for program delivery. The problem would be that a new pipeline degrades the value for the rights to the existing pipelines, and there's that scary interval when the new revenues haven't replaced the lost old revenues.

      Which is why disruptive business models and content delivery will not come from the established studios. It has to come from someone who doesn't have any old-school revenue streams. On the other hand, broadcast quality visual entertainment is very expensive to produce and is funded by advances for rights to distribute. New editing software, digital media, and digital SLRs evolving into pretty good quality video cameras are bringing costs down. Distribution costs are also way down. That leaves the costs of talented craftspeople and marketing.

      We note that there's been an explosion in documentary filmmaking and maybe even the documentary-style of story-telling, where the craft requirements are simpler: music, quick naturalistic lighting, videography, and editing.

      Going back to Apple, the book publishers and movie studios are not fully on board with iTunes. The former group have to not irritate Amazon. The latter group don't like what happened to the music business. Apple is not likely to get more breaks from the traditional television distributors just because there's an image of a fruit on the panel. And, we note that all the major studios are also owners of cable and broadcast properties, upstream and downstream pipes.

      That leaves Apple pinning hopes on new content producers who are going to innovate regarding production, distribution, and marketing and may be looking for a way to get a more direct connection to the audience. Still, human beings like stories and fiction is more consistently compelling than real-life or enhanced real-life. So add back in the costs for set construction, special effects, writers, and actors for something that will draw an audience away from NCIS. (By the way, Sunday Night Football was the top-rated program for 2011-2012.)

      And there's the chicken-egg paradox. We've been having web tv series for 16 years and the break-outs are almost non-existent. Does it make sense for Apple to produce a tv platform that will be geared to a production business model that hasn't taken off yet? Does it make sense for people to risk the money for production values when the big studios are still the only way to get to customer eyeballs and make back the investment?

      Let's assume that Apple did spend billions to push the entertainment industry forward into disruption. What's the thing that Apple figures out that Google (with its YouTube content assets) or, sure, Microsoft couldn't get running within 12-24 months? I suppose patents come into play here, but, ugh. That'd be Apple leading innovation by blocking innovation.

      Besides, if that version of Apple's TV is a screen plus content delivery via apps, don't we have all the pieces in our iPads and Macs? AppleTV exists and it's BYOS, and Apple lets the screen makers scrap it out in low margin land.

      Munster has always acted as though wrapping a screen around an AppleTV is all the work needed to be done. If Apple hasn't done so yet, it must be engineering befuddlement or something technical. (How many years has Munster been claiming anticipation and disappointment as each major Apple announcement approaches and recedes without that tv?) Sorry, sir, no, that's not the issue.

      The tricky bit is the high-concept tv where upon arrival consumers go "Yes, I get it. I see what it is I didn't know I wanted." and the producers, especially the new school ones, go "Now I see how to make money and I get rewarded for my risk while maintaining creative control."

      To paraphrase Bob Dylan: there's something not happening here and you don't know what it is, do you, Mr. M.
  • My guess is...

    ....that these analysts' credibility is going to take quite a hit when the "Apple TV set" materializes. They have sure come up with some wild stuff. Personally, I have studied my TV, and know where the HDMI sockets are located, so I'll be ready. :-)
    • I disagree. It appears of late

      that analyst can be wrong, yet their credibility remains intact. Would such a thing happen in any other field?
      Tim Cook
      • Weathermen or baseball players?

        Weathermen seem to be wrong at a rate which would result in summary termination for most jobs, and for a baseball player, even "getting it right" more than 40% of the time is regarded as a virtually unattainable goal.
        Third of Five
  • After Thanksgiving?

    Can I say I have some persistent doubts?
  • Whatever

    Munster is one of the biggest Apple Muppets on the planet and he constantly kisses their collective rear ends in hopes of getting tidbits thrown to him from Apple's PR department.

    The world doesn't need another TV manufacturer.
    • If Apple made a habit of "Just being another one" I'd agree

      with you. My take on this will be "IF" Apple does anything with a TV it won't be just another Television.

      Pagan jim
      James Quinn
      • So what could they do that others have not?

        Integration with iTunes, well duh, but so what? I have tons of options to rent or buy content now with my DirectTV setup and my XBOX (which also gives me a fantastic gaming platform).

        Integrated Apple TV? See above. Touch screen? Sorry, I don't want to get off my couch to touch my screen. Integrated voice command, that may be of interest, having something like a Kinect interface may be of interest, but then again, I am capable of pushing a button on my remote to change channels instead of asking my TV to do it :-)

        I am not enamored with anything Apple produces. Their phones are mediocre and their tablets are too expensive for what you can use them for. Apple markets well which means that they cater to the lowest common denominator, those that are affected by marketing and buy things because they think it makes them look cool.
      • I get it when it comes to Apple you don't get it:)

        Still when all is said and done and you do go on on this subject it is just your opinion. Not a fact but an opinion. You have every right to think as you do and to feel as you do no matter how wrong you may be it's still a free country. As for what Apple will do? Not certain Apple will be doing anything at all for this is just guessing until it's announced.
        What might they do? Can't tell you cause like many I was fairly surprised with the iPod and iTunes. I was surprised by the iPhone and later the iPad. All i knew at the time were there were other devoces out there that c;aimed to do the same things but to my way of thinking like the then RIM phones they where all clunky and awkward to use or make use of while the Apple products I've mentioned were a breeze to use... I could literally hit the road running and I liked that and still do. That is the reason I choose Apple products not cause it makes me cool (To be frank one can not be made cool... Cool is a state of being that no amount of money or status can grant you). No I use Apple cause it makes what I want to do easy and for the very most part care free which is my whole out look on life. What me worry?

        Pagan jim
        James Quinn
      • You are correct, omdguy

        Apple is at a point where they understand [i]their[/i] customers, without necessarily having to cater to everyone. Apple will release a product like this when they calculate that enough of their customers will purchase one to make it profitable.

        By "Their customers" I speak of those that purchase any product as it has the Apple logo on it. This is not something catered to customers that have purchased an iPhone, while having no interest in an iPad, iMac, or AppleTV.

        Will an AppleTelevision outsell the AppleTV? I could not say. Would it be profitable? Yes, it would. The problem that these analyst have is calculating where Apple is at in terms of those customers.

        The iPod was a hit, the iPhone an extention of that, the iPad yet another extention. AppleTV was to be an extention into the living room that did not materialize to the point that Apple had hoped, thus forcing Steve Jobs to reverse direction and relabel it "a hobby", as even they miscalculated its appeal to their core customers.

        As you have pointed out, it must bring far more then gesture, voice, and iTunes integration to be worth marketing to the general public.

        But then again, that is not Apple's focus in regards to an item like the one being specuated apon in the article.
        Tim Cook
      • Your logic is flawed on this one, Mr. Spock

        You agree with omdguy's statements, which means, you agree with his opinion that Apple caters to the lowest common denominators - that opinion, of course, pertaining to software, hardware and computer users.

        You state that the iPod, iPhone and the iPad are hits. Using your logic, the reason that they are "hits", in your opinion, is that all these devices cater to the lowest common denominators.

        Personally, I thought all the above devices cater to the sophisticated users that appreciate fine workmanship and impeccable quality of materials and of software and hardware design excellence. But then, that's my opinion.
      • What else?

        My current television has a Xbox/Kinect, cable, free to air and Internet. I can talk to it, wave my hand and download anything I want. It also has a DVD attached, but the Xbox now makes that redundant and the Xbox will be the last thing I buy optical media for.

        What can Apple offer me? Guaranteed the "TV" will be significantly overpriced and allow me to pay and play in Apple's sandbox, but in the end, a TV is just a display monitor and most of the other manufacturers are integrating my external devices, so Internet and gesture control are built-in.

        If Apple makes any money on this, at least we'll finally find out how many suckers are born every minute.
      • Actually, your question "What else" is a good one.

        Your MS Windows based multimedia system you cite in your arguments is a fine example of what is possible in your ecosystem of preference.

        Personally, if this rumored Apple TV becomes the "iHub" concept blogged about that could combine all your hardware that your multimedia systems uses into one display/computer/TV device coupled to a "state of the art" display technology (rumored, of course), than the simplicity of such a system - although not intrinsically better than yours - coupled to an initial attractive purchase price - might offer sufficient reasons for consumer acceptance.

        Remember, everyone (and you included) believed that the iPad 1 would have an initial retail price close to (and not lower than) $800 to $1000 dollars.

        Everyone - including you - think that the rumored Apple TV "should" or "will" cost between $1,500 and $2,000 dollars.

        I will reserve judgement on a "yet to be released" Apple TV initial price point. (IMO, there are way too many sources that cite this rumored product to make this rumored Apple TV further from a "vaporware" item rather than an unreleased future Apple product. But, that opinion could be wrong and it very well might evolve into a vaporware item. Only time will tell.)
  • Sure

    B&O *can* sell TVs for 3700 USD, but B&O is a luxury brand. They're to electronics as Rolls Royce is to cars. When one buys either one, one buys the brand, not the actual product. If people bought Rolls Royces because they need to go from place A to place B, no one would buy one. They buy them because the want to show the world that they can afford one. And the exact same thing goes for B&O TVs. No one buys them because they want to watch House. They buy them to show that they can afford one. And because they're beautiful to look at, even when they're turned off :)

    Apple may be many things, but its definitly not in that league.
    • totally

      hit the nail on the head.
      You cannot compare Apple to B&O - any device B&O produce is a 1000 times more beautiful, better made, and better sounding compared to any apple device.

      Hahaha i love it when apple fan boys try and compare goods to apple products e.g. the usual tripe of apple macs and BMWs

      Its all abut how small their penis' are..I mean big..

      In the UK we already have all the major tv companies selling all in one smart tv's with applications. You can buy media centres already that can do everything a huge ipad can consoles do all of the above just about..
      Unless apple bring something to the market that will do the ironing and make the tea then I don't really care..
      But then it will be glammed up with something that apple says it can do better then everything else and is new and revolutionary and people will fall for it and buy it..when really it all exists..

      You have to ask yourself.. Do you really need it.. no..get the game board out the cupboard and play snakes and ladders with the kids
  • Re: Apple to debut TV set in December

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  • This Is All Hype!

    Now dont get me wrong I love my iPod, iPad and iPhone just as much as the next guy. But why should I pay so much for the Apple logo? The new Apple TV better show HD holograms and come with alien technology if they want my money.
  • APPLE TV, will be cooked by next year

    Apple is the biggest ripoff company out there. TV LOL, Stick to what you know how to do, if you don't it may be a painfull suprise APPLE