Uncertain Future of Apple's Television Venture
History of Apple Television Rumors
Back in 2011, Piper Jaffray analyst Gene Munster firmly believed that an Apple television was not only in the making but was about to be launched. Since then, we have been closely monitoring Munster's predictions that Apple would introduce a television set either "this year" or "within a year." These predictions were repeated in subsequent years, including 2012, 2013, and 2014. However, in 2015, he finally changed his mind. Although it seemed logical in the early days, with Munster and a few others being so confident, it became increasingly difficult to envision how this could be feasible today.
Large-screen, high-spec TVs have become common nowadays. Take a look at the best-selling TV sets at Best Buy. The number one model is the 65-inch Sony Bravia 3 LED 4K with HDR, Dolby Vision, Dolby Atmos, 4K upscaling from HD content, and various image-processing technologies for both movies and games. It costs $650. Next is a 75-inch Samsung model with 4K resolution, HDR, upscaling, motion-processing, and color-processing. It costs $550. The third in line is a 50-inch Samsung with similar specifications, priced at $250.
Challenges for Apple in the TV Market
While the presence of cheaper models has never deterred Apple from pursuing its goals in other product categories, the TV market is different. In other areas where the company operates, there are significant spec differences between Apple products and low-end ones. However, in TV, one can obtain truly impressive specs in large sizes for prices that seem unreasonable for Apple.
Sure, there are high-end models available. Samsung offers a 114-inch microLED model for a whopping $150,000 as a special order and a $20k 85-inch model that is more or less readily available. But the reality is that almost anyone who desires a high-spec TV can buy one for under a thousand dollars, and the brands selling them make only a small profit on most models. Televisions are a low-margin business.
Potential for Apple in the TV Market
It is not impossible for Apple to launch a high-priced TV with its usual 37%-ish margin. It could enter the territory of Bang & Olufsen. But it is likely that it would sell premium TVs in even smaller volumes than the Vision Pro. The Vision Pro makes sense for Apple not because it is generating immediate profits but because it gives the company a foothold in an emerging market with significant future growth potential. This potential may materialize in three years, five years, or even ten years - it is difficult to predict. However, it is not unreasonable for Apple to believe that it will take off at some point and that it is establishing a stake in anticipation of that time.
In contrast, an Apple television has no long-term potential for significant future growth. Admittedly, the author, who hasn't owned a television for over 20 years, might not be the best person to ask. But if they were to buy a TV, they would prefer a simple dumb screen (or a smart TV with apps they never use) along with an Apple TV box. This is the model that Apple has been following for years. Buy any TV and convert it into an Apple one by paying $129 or $149. When the smart features become outdated, instead of replacing the entire screen, just buy another cheap Apple box. The author doesn't expect this model to change. Please take our poll and share your thoughts in the comments.