Okay, we’ve heard before that Apple should or is going to get into the incredibly fractious TV set business. But another voice now suggests the Cupertino, Calif. tech giant needs iTunes to ensure success. Apple’s $65 billion in cash could go a long way toward that goal.
“Our view is that Apple is unlikely to enter the television set market without a core level of differentiation,” UBS analyst Maynard Un told investors Monday. Differentiation? Thy name is iTunes — and content, Um believes.
This isn’t Um’s first rodeo when it comes to these infectious rumors. After all, who wouldn’t want an Apple widescreen alongside her iMac, right? But getting the content owners to agree on such a plan can be a like doing root canal on yourself. Answer: carpet-bombing with cash.
All that cash Apple has stored away for a good opportunity could “secure a large amount of digital video content from studios or even purchase its own original content for a service similar to Netflix,” argues Um. Netflix went from the mail-in DVD business to a massive streaming-video service without much of a hitch.
If Apple can replicate for TV sets what it’s done with smartphones, the analyst sees a new ecosystem worth a $100 per share bump. “Apple’s core business is undervalued at current levels and see even greater upside from market opportunities such as television sets,” he writes.
Just as Apple sells services to support the iPhone or iPad, the Cupertino, Calif. company could launch the “Genius Squad” to support TV installation. A fee-based version of Apple’s retail “Genius Bar” experts, a “Genius Squad” would help install the complex television systems, writes Um.
