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Launch date remains unknown, but Apple is actively pursuing this new market

The persistent reoccurring rumor that Apple, Inc. (AAPL) will be making television sets has surfaced again.  The Wall Street Journal is offering up in a new report evidence of secret meetings inside of Apple planning the launch of the new television product.  The important take home message is that while the launch date appears to be uncertain, Apple is hard-targeting the product (courtesy of deep negotiations with TV content providers and its work on developing advanced user interfaces).

I. Apple Moves Towards Television With New UI, Licensing Work

We first heard about the possibility of the Apple LCD TV in an informal discussion with a former Apple Canada executive turned financial analyst.  He claimed to us that the project was already relatively advanced and would likely debut sometime in the 2011-2012 time frame.  

While that schedule now looks unlikely, numerous reports since have indicated that Apple is still chipping away at development.  

Currently Apple sells a set-top box that offers streaming media functionality, but lacks the ability to install and use third party apps, a capability which recently came to Google Inc.'s (GOOG) Android (Google TV) set-top boxes and integrated internet TVs.  Apple TV is relatively inexpensive retailing for a modest $99 USD.  While Apple announced 3 months after the device's launch that sales had hit 1 million units, it has since refused to comment on the device's sales.  Rumor has it that the device is sharing the sales difficulties of Logitech International S.A.'s (SIX:LOGN) Google TV set-top box.
 
The Wall Street Journal report cites private commentary at Apple's 2010 "Top 100" meeting for senior executives as cause for skepticism.  At that meeting an executive asked late Apple CEO Steve Jobs whether an Apple TV was in the works, and he responded that the profit margins were too low compared to mobile electronics and that people bought television sets too infrequently to make it worthwhile.

On the other hand, the report points to many signs since then that Apple may indeed be preparing to drop a shiny new television.

Steve Jobs challenged TV providers in a series of recent meetings, asking them how much of the world's video content they truly owned.  While the meetings were reportedly in the "exploratory" phase, the parties involved discussed the possibility of Apple becoming a licensed reseller of television content, similar to cable networks.  Such a subscription service could give Apple's next generation television product an edge over competitors like Google TV.

Google is reportedly in similar talks with content providers.

In his official licensed biography, Steve Jobs commented that after years of prototypes of smart TVs that connected to mobile devices like the iPad and iPhone that Apple had "finally cracked it".  In their most recent meetings with television content providers, this topic was raised as well, with Apple discussing a scheme in which a user could begin watching their show on their TV and then moves to another room and continue to watch it on their iPad or iPhone.

Mr. Jobs also indicated that the iPhone or iPad would be able to be used as an advanced remote control for the upcoming television.   Apple also appears to be working on other advanced interface technologies.  The WSJ report comments:

In the recent meetings with media companies, the Apple executives, including Senior Vice President Eddy Cue, have outlined new ways Apple's technology could recognize users across phones, tablets and TVs, people familiar with the talks said.

In at least one meeting, Apple described future television technology that would respond to users' voices and movements, one of the people said.

Such technologies have become mainstream in the video game console industry, thanks to pioneering innovators like Nintendo Comp., Ltd. (TYO:7974) and Microsoft Corp. (MSFT).  But the technologies have thus far only been applied minimally to actually working as a user interface to the television (Microsoft does offer Kinect control in certain select Xbox 360-accessible television programming).

II. Why an Apple Television Makes Sense in the Long Run, Financially

One reason why an Apple television product seems likely is that it would provide a new resource stream for Apple, should it exhaust its existing sales streams.  

While it's entirely possible that the iPhone and iPad could continue to thrive for decades to come, Apple's history suggests that while the company is adept -- perhaps the best -- at garnering an early sales and brand image lead, that its penchant for proprietary first-party products and core software has led to it being eventually marginalized.  

Already Apple's iPhone has fallen quite a bit behind Android in smartphone sales.  And while Android tablet sales have grown at a slower rate than expected, analysts generate are expecting them to pass iPad sales around 2015.

At this point Apple seems almost unassailable from a profitability standpoint, if not from a unit sales standpoint.  However, as other highly profitable smartphone makers like Canada's Research in Motion, Ltd. (TSE:RIM) have shown, it only takes a couple years of dropping sales to see your cash reserves and quarterly profits erode.

Steve Jobs w/ iPad
Apple's upcoming television product could be the first major new product to launch without Steve Jobs at the helm, since the late 1990s. [Image Source: AP]

Aside from business side of the equation, the launch of a "smart TV" product would be a landmark moment for Apple, as it would mark the company's first major new product introduced since the death of Steve Jobs.  Of course, by the sound of it, the finished product would draw heavily on the early prototype work of Mr. Jobs and Co., so even in his grave he could still remain Apple television's MVP.

Source: WSJ



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This article is over a month old, voting and posting comments is disabled

I think Microsoft has already won
By Mitch101 on 12/20/2011 12:35:32 PM , Rating: 5
I think Microsoft already won, throw on Kinect for voice control and if you have the Windows Phone 7 use the X-Box Companion app.
http://www.youtube.com/watch?v=nMbDa0HcGRo

57.6 million X-Box 360's sold to date and thats Pre-X-Mas.

Verizon Fios TV:
HD Channels
BET
Cinemax
CNN
Comedy Central
ESPNews
Food Network
HBO 2
HBO
HGTV
MTV
Nickelodeon
Spike
TBS
TNT
Travel Channel
truTV
VH1

SD Channels
Boomerang
Cartoon Network
DIY
Hallmark Channel
HLN
MTV2
Nick Jr
TCM
TV Land

December 6:

• EPIX. United States
• ESPN on Xbox LIVE (ESPN). United States
• Hulu. Japan
• Hulu Plus. United States
• LOVEFiLM. United Kingdom
• Netflix. Canada, United States
• Premium Play by (MediaSet). Italy
• Sky Go (SkyDE). Austria, Germany
• Telefónica España – Movistar Imagenio. Spain
• TODAY (MSNBC). United States

Later in December:

• 4 on Demand (C4). United Kingdom
• ABC iView (Australian Broadcasting Corp.). Australia
• AlloCiné. France (AlloCiné), Germany (Filmstarts), Spain (Sensacine), United Kingdom (Screenrush)
• Astral Media's Disney XD (Astral Media). Canada
• blinkbox (Blinkbox). United Kingdom
• Crackle (Sony Pictures). Australia, Canada, United Kingdom, United States
• Dailymotion. Available in 32 countries globally
• Demand 5 (Five). United Kingdom
• DIGI+ (CANAL+). Spain
• GolTV (Mediapro). Spain
• iHeartRadio (Clear Channel). United States
• Mediathek/ZDF (ZDF). Germany
• MSN. Canada, France, Germany, Italy, Mexico, United Kingdom
• MSNBC.com. United States
• MUZU.TV. Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, United Kingdom
• ninemsn. Australia
• Real Sports (Maple Leaf Sports). Canada
• Rogers On Demand Online (Rogers Media). Canada
• SBS ON DEMAND. Australia
• Syfy (NBC Universal/Syfy). United States
• TMZ (Warner Bros.). Canada, United States
• TVE (RTVE.es). Spain
• UFC on Xbox LIVE (UFC). Canada, United States
• Verizon FiOS TV. United States
• VEVO. Canada, Ireland, United Kingdom, United States
• Vudu (Wal-Mart). United States
• YouTube. Available in 24 countries globally

Early 2012:

• Antena 3 (Antena 3 de Televisión). Spain
• BBC (BBC). United Kingdom
• CinemaNow (Best Buy). United States
• HBO GO (HBO). United States
• MLB.TV (MLB Advanced Media). Australia, Brazil, Canada, Chile, Columbia, Czech Republic, France, Germany, India, Ireland, Italy, Japan, Korea, Mexico, Netherlands, New Zealand, Poland, Russia, South Africa, Spain, Sweden, Taiwan, United Kingdom, United States
• Telenovelas/Sports (Televisa). Brazil, Chile, Colombia, France, Italy, Mexico, Spain, United Kingdom
• Xfinity On Demand (Comcast). United States




By steven975 on 12/20/2011 3:51:26 PM , Rating: 2
And to those of us that have been using our 360s as Extenders, we've been doing this for years.

I can watch any channel I subscribe to on my Xbox as it stands now. I guess this adds one more avenue, but comparing HBO in the new FiOS app to HBO coming via QAM, the latter looks a heck of a lot better.


RE: I think Microsoft has already won
By TakinYourPoints on 12/20/2011 4:08:00 PM , Rating: 2
Hopefully a software update will improve Kinect voice control, because right now it is absolutely terrible. There is no comparison between voice control via Kinect and Siri. I think Microsoft knows this and it will be a huge motivator to improve it.


RE: I think Microsoft has already won
By Mitch101 on 12/20/11, Rating: 0
By TakinYourPoints on 12/20/2011 5:03:29 PM , Rating: 4
Siri has always required a network connection, different functions. Normal voice commands on an iPhone that don't query Siri (ie - "call John Doe mobile", the same ones you're showing on your WP7 device) don't require a stable network conection to it.

Either way, Siri is way better than Kinect's voice commands. I saw it back when it was prototype at E3 and I've used the official release and it suuuucks. It is in massive need of improvement as it barely functions well enough for video control, let alone anything more complex. Sorry.

As for Chinese labor, complaining about Apple and Foxconn (the same company that makes nearly every component in my DIY PC, as well as my XBox 360, my Wii, my Playstation 3) is like complaining about the sex trade while getting serviced in a Thailand brothel. Hell, Nokia is using them to make Windows Phone 7 devices as we speak.

http://www.dailymail.co.uk/news/article-1266643/Mi...

Sleep well.


"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation














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