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Apple has its sights set on conquering a new market

DailyTech earlier this year offered information from a definitive source which indicated that Apple Inc. (AAPL) was eyeing a move into the LCD television business.  At the time we had talked to an ex-Apple executive who had boasted of the potential of the device.  They pointed to a late 2011 launch, but added that a 2012 launch could be in order given (in so many words) Apple's desire to make things sleek and "perfect".

Well a 2011 launch clearly isn't in the cards, but several sources including Bloomberg and    Piper Jaffray Cos. analyst Gene Munster, have confirmed our source's statements and indicated the LCD TV is still in Apple's product pipeline.

Clues to the pending launch can be found in Walter Isaacson's biography of late Apple CEO and co-founder Steven P. Jobs.  Published by CBS Corp. (CBS), the book recounts an interview in which Mr. Jobs described cracking the problem of how to synchronize content from Apple devices (iPods, Macs, iPhones, iPads) with the TV.  Mr. Jobs stated, "It will have the simplest user interface you could imagine."

Bloomberg adds to the picture, informing that while a source indicates that the TV may never be released, Apple seems to be leaning in that direction, with several sources indicating that iTunes creator Jeff Robbin has been tasked with leading the new TV effort.  Mr. Robbin is an accomplished Apple engineer who helped design the company's hit iPod MP3 player, as well iTunes.

Gene Munster claims that Mr. Robbin's team is cooking up a prototype of the LCD set and could release the set sometime in 2012 or 2013.  He says the release window largely boils down to what kind of LCD unit supply and manufacturing contracts Apple can obtain.  Apple is notorious for driving industry-leading profit margins by ruthless negotiations when it comes to supply and manufacturing contracts.

Apple currently only manufacturers "Apple TV", a settop box that runs a cut down build of iOS and can run iTunes, YouTube, Netflix, and a handful of other services.  The late Mr. Jobs labeled Apple TV "a hobby".  Sales of the device have been low compared to Apple's other product lines.

The new device would reportedly be a full LCD TV unit, with connected entertainment features baked into it.  Presumably driven by iOS, it would wirelessly sync content with other Apple devices, and could even offer rudimentary console gaming, on par with the iPad.

In that regard, Apple will look to follow in the footsteps of Google Inc. (GOOG).  Google has partnered with companies like Sony Corp. (TYO:6758) to release television sets with internet-connected features.  However, the lack of third party apps has stunted the platform and caused a poor reception.  Google has learned from this mistake and is looking to roll out Android 3.1 Honeycomb to sets, adding third party app compatibility.  Apple will likely follow a similar approach, offering "iTV" apps from its App Store. 

The TV project presents both a challenge and an opportunity for Apple, with respect to its smart phone arch-nemesis Samsung Electronics Comp., Ltd. (SEO 005930).  On the one hand, the companies' deterioriating relationship presents a supply problem as Samsung is one of the largest suppliers of large LCD screens.  On the other hand, by releasing its only branded televisions, Apple would strike a blow at one of its rival's core businesses, much as Samsung struck Apple's smartphone business recently surpassing it in sales.

Source: Bloomberg

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RE: In before anti-Apple banter is spewed
By TheDoc9 on 10/26/2011 11:28:38 AM , Rating: 2
I agree with this. Target the right size set and features to college kids and this will sell like hotcakes. Internet streaming, easy access and hookup. Sure it's already available through other devices but having it in one sleek, easy to use device will be a big hit.

Just think of how great it will be to never have to help your family members set up their home theater again! TV manufactures should be shaking in their boots right now, and as for cable tv that's a sinking ship.

RE: In before anti-Apple banter is spewed
By Cheesew1z69 on 10/26/2011 1:11:46 PM , Rating: 2
TV manufactures should be shaking in their boots right now
And why is this? Because it's Apple? I am sure none of them are even thinking about Apple and the very little waves they may make with a TV.

RE: In before anti-Apple banter is spewed
By mellomonk on 10/26/2011 5:58:57 PM , Rating: 2
It is not about channels or content, it is about the INTERFACE. I read a good deal of industry trade pubs and the TV industry has been fearing Apple's entrance into TVs for years. It isn't totally about sales, Apple's sales would be primarily in the high end. But rather that they might come up with an interface that will instantly make their menus and the like obsolete. They would have to rethink and redesign their dated confusing controls all the while running the minefield of patents that Apple would surely be granted. I own two modern TVs (Samsung, Sharp) and a projector (Epson). Setting them up, calibrating, ect is a total geekfest. I set my mother up with a small home theater setup. Every time she plays a blu-ray, I receive a phone call to help her get back to the Cable or similar. In short they should be afraind, very afraid.

By aharris02 on 10/27/2011 12:04:24 AM , Rating: 2
I think a good way to sum it up is that when Apple enters a market, they have a keen ability to raise the expectations of the consumers of that market.

TV manufacturers and cable providers fear this because they've been getting away with serving consumers who have sub-par expectations for so long that they probably don't know how to compete with cutting edge, or anything within the ballpark of it.

By Reclaimer77 on 10/26/2011 6:20:50 PM , Rating: 1
Target the right size set and features to college kids and this will sell like hotcakes.

What college kids YOU know that go around buying $5,000 TV's?

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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