Apple TV: exec says it's coming 'soon'

By Jonny Evans

While considering the Facebook IPO and that company's seeming disregard for its users/customers/business as shown by its failure to give each user a single token share, do take a look at these Strategy Analytics survey results, which claim nearly half of iPhone users would likely buy an Apple [AAPL] television soon after the product's launch. Putting the user first counts for something, it seems...


Turning on to television

The analysts claim: "Nearly half of existing iPhone users would be very or somewhat likely to buy an Apple iTV soon after its launch." The survey sample included 6,000 consumers across the US, France, Germany, Italy and the UK.

Claims Apple intends introducing such a product have been in circulation for years. Apple board member, Millard Drexler this week fueled the fire when he said that, while the living room has been a hobby with the Apple TV, "the living room they're dealing with at some point in the near future." Does this mean speculation of a 2012 launch for the device is back in the frame?

We know Apple has filed huge orders for memory and that its manufacturing partner, Foxconn, has secured a major stake in Japanese electronics and display maker, Sharp. We've also been experiencing a rash of iPhone 5 rumors in recent weeks: is it possible some of these component-related claims might instead be connected with Apple's planned television? Could an Apple TV be planned as a WWDC surprise after all? (I don't think it is, but it isn't completely improbable.)

What animal is this?

The iTunes-compatible television will likely offer full access to your iTunes collection, ship alongside introduction of television show subscription packages and iCloud movie streaming, deliver support for Siri and some apps, and will be compatible with your iPhone, iPad or Mac. Given Apple's continued focus on industry-leading Retina Displays, I wouldn't be at all surprised to see the system offer the highest resolution of any television available in the market.

All of this will be wrapped-up in Sir Jony Ive's hallmarked elemental expression of beautifully-designed simplicity. This thing will rock. But what will it cost? In the present climate, can Apple make success from a premium product launch, or will it instead refine its ambitions to introduce a more competitively-priced offering?

"The success of an Apple iTV hinges on Apple's ability to match innovation with appropriate price points," warns the Strategy Analytics report. "While 35 per cent of surveyed US consumers indicate willingness to pay $1,000 or more for an Apple-branded TV, only 14 per cent would be willing to pay any more than $1,600," a company press release states.

Denting the universe, one market at a time

Should Apple decide to introduce a new system aimed at wealthy consumers, then you can expect the market reception to be slow. This does not mean it won't cause trouble for incumbents in the HD TV space. Sony, Samsung, LG and others will certainly feel the pinch if Apple scrapes up a huge chunk of the premium slices of their business.

After all,  Sony has admitted itself to be losing money on every TV it sells. Taking the high margin sales out of the equation will leave competitors holding handfuls of television dust. To be sure, Apple's success is by no means certain, despite which competitors would certainly shudder at the crack of its competitive lash.

Back to Strategy Analytics, where analyst, Kantideep Thota, points out: "More than one-quarter of non-Apple TV owners could potentially migrate to an Apple-branded TV in a fairly short period of time."

You can skip the next two paragraphs if statistics hurt. Apple hasn't been that open when it comes to disclosing Apple TV sales. We know it sold 1.4 million second-generation models in the first quarter of 2012. We also know it shipped two million of those devices by Q2 2011. Sales of the previous generation model are hard to estimate. Encompassing both generations, let's grab a ball park total sales figure of 8 million.

If a quarter of these estimated users were to purchase an Apple television in the first six months, that equates to two million television sales. If half of c.200 million iPhone users also purchased one of these new TVs, then you're looking at a staggering number of these sets in living rooms across the planet. In one move, Apple would define the high end TV set industry.

What happens next

We've all been watching Apple for long enough to know this pattern:

-- Apple looks to a market and launches into that market with a distinctive and superior product of some kind.
-- Existing incumbents reject the product, analysts make conservative predictions and shareholders do whatever it is shareholders do; meanwhile a few million customers buy the new 'iThing'.
-- Customers like it, get enthusiastic about it, and a few of their friends purchase one too.
-- Then analysts get more excited, shareholders do whatever it is that shareholders do, and existing incumbents introduce products which are a bit like the Apple device they were dismissive of in the first place.
-- Apple's product gains momentum.
-- The sector get disrupted and for years afterwards people say they never saw it coming.

That's the story of the iPod, iPhone and iPad. By now this has become such a traditional pattern I'm surprised people don't notice it more. It isn't as if we didn't see months and years of speculation in advance of the release of each of those products. I do sometimes wonder if executives at competing companies keep up with market rumors before they turn to tell shareholders how surprised they've been by Apple's most recent market-predicted moves.

How soon is soon?

We don't know if the Apple television is going to happen (well, we do really, we dare not say), or when it is likely to happen (this year or next). What we do know is that in classic Apple rumor-fanning style, a board member this week promised some activity in this sector, "in the near future".

Just how soon is that? Granted, we know it was soon enough that the marketing genius that is Steve Jobs couldn't resist mentioning it inside his biography, but will soon be soon enough? And will you be rushing to the Apple Store to pick one up? Or will you not have time while you search for a Facebook alternative now your place for friends has become a commodity to be traded by those shareholders doing whatever they do on the stock market?

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