Apple needs 22% of TV set market to stay on top
Apple needs new features and content to separate it from the television pack, research firm says
Computerworld - Apple rose to the top of the ranks of the Fortune 50 on the success of the iPod, iPhone, iPad and MacBook, but to continue being a market leader, it needs new products.
Of the two products that Apple is believed to be working on -- a smart watch and a television -- a flat-screen TV has the potential to add billions in revenue to Apple's bottom line, according to a report from U.K.-based Generator Research.
The report predicts that Apple should be able to garner about 22% of the TV set market over the next 10 years.
Apple's market capitalization is around $473 billion. In order to maintain a market valuation approaching its market cap, Apple needs new products.
"Unless you make completely crazy assumptions about how fast sales of the iPhone and iPad will rise... then the only way you can get to a valuation that is close to the company's market capitalization is to assume that Apple will launch new products -- products that do not exist," Andrew Sheehy, a chief analyst with Generator Research, wrote in the report.
Sheehy said achieving a 22.2% television set market share by 2023 is less than what the company has already managed with the iPhone.
That 22% market share would translate into 72 million television units worth about $81 billion in revenue, Sheehy added. By comparison, Generator Research predicts a smart watch from Apple would achieve about $40 billion in revenue by 2020, and would level off after that.
In 2015, Apple's television unit sales would be around $2 million, representing a 0.7% share of total worldwide flat panel TV set shipments. However, shipments would then grow to reach 15 million in 2017 (4.9% market share) and 72 million units in 2023 (22.2% market share), according to Generator Research.
A market in turmoil
The global TV set market is expected to see its second consecutive annual decline in 2013 due to a slowdown in replacement and secondary purchases, according to Veronica Gonzalez-Thayer, an analyst with IHS Electronics & Media.
For Apple to attain a significant share of the TV market, the company would have to create demand through a unique product so that consumers would be willing to replace their existing sets or buy an additional one.
"Still, we would expect for this television to sell for a premium price, which could become an obstacle for Apple since the TV market is extremely price sensitive and has been suffering from declining margins for a few years," Gonzalez-Thayer wrote in in an email reply to Computerworld.
The television market is shifting from one dominated by Japanese companies, such as Sony, to South Korean companies, such as Samsung, Generator's report states.
"And in spite of assurances to the market that better times are ahead, Sony's TV set business continues to operate at a loss -- as has been the case for the last 8 years," Sheehy wrote in the report.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- HP HAVEn: See the big picture in Big Data HP HAVEn is the industry's first comprehensive, scalable, open, and secure platform for Big Data. Enterprises are drowning in a sea of data...
- What Datapipe customers need to know about the new PCI DSS 3.0 compliance standard This handy quick reference outlines what PCI DSS 3.0 is, who needs to be compliant and how Alert Logic solutions address the new...
- The 12 PCI DSS 3.0 requirements addressed by Peer 1 Hosting This handy quick reference outlines the 12 PCI DSS 3.0 requirements, who needs to be compliant and how Alert Logic solutions address the...
- Defense Throughout the Vulnerability Life Cycle This whitepaper provides insight into how to leverage threat and log management technologies to protect your IT assets throughout their vulnerability life cycle.
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All iOS White Papers | Webcasts