Analyst Speculates Apple TV Success Will Depend on Software and iOS, Not Big Screen TVs


A5X inside, but nothing else new.
Set top box with software, integrated HDTV, or both? One analyst thinks the former.

In an investor note today, Barclays investment analyst Ben Reitzes comes down squarely on the side of many others who believe a set top box is the way Apple has “cracked” the TV scene, rather than with an integrated television set created by Apple hardware designers. His opinion is that Apple is more likely to create a TV product that focuses on the software and not the hardware.

“We believe consumers would welcome such a product from Apple,” wrote Rietzes, “as well given that many younger customers seem to be watching content on demand on smaller screens (iPads, laptops) in private places – and only Apple seems to be the company that can redirect that content back to the big screen.”

Reitzes continues, opining that while smaller screen media viewing hasn’t made enough money, yet, Apple’s dominance in the iPhone and iPad markets give the company a better chance than anyone else to partner well with traditional content providers.

“The risk of not partnering with Apple is that as young people may “cut the cord” given the cost of cable,” he said, “and that a screen connected to an Apple TV with AirPlay can provide a substantial array of content.”

Cult of Mac has reported on the likelihood of a fully integrated Apple HDTV set, as well as Apple’s negotiations with cable companies and other content providers. Regardless of the ultimate form factor, it’s fairly clear that Apple is indeed planning on taking over the living room by storm, as it’s where most people consume their content, second screen be damned.

Apple, of course, has not confirmed any details as of yet, so it’s all just rumor and speculation at this point. There’s nothing to say that there isn’t both a hardware innovation with an HDTV ready to go as well as a set top box with “only” a software innovation. It doesn’t really matter: bottom line, Apple’s getting ready to take the next step, it seems, in its “hobby” business.

Source: Barron’s
Via: MacNN

  • Jonathan Ober

    I never felt that the AppleTv would be an actual set with a screen and speaker system. The current Apple TV is great in streaming content to a tv of any size which I think is better all around than Apple making an actual screen. Besides if they get into the screen game they would need to make varying sizes which would mean more overhead and overstock than I think they really want. Plus it just doesn’t fit with their store model so the smaller box is definitely more likely. Now we just need to see the software within Apple Tv morph into something that ‘kills’ current cable watching habits.

  • HerbalEd

    I’ve never believed that Apple will produce an actual TV set. Why would they want to? Why limit themselves to such a small customer base? How often do you replace your TV?

    What I’m betting on is Apple producing a super-upgraded Apple TV … kinda like TIVO on steroids … that’ll interface with virtually all modern TVs, as well as computers, iPhone, iPad, iPod, iCloud, iTunes Store, etc. … and be a DVR.

    The big, long-continuing money is not in hardware, but in the content (a la iTunes selling music, movies, TV shows, books, etc.).

    Also, don’t be surprised if Apple buys TIVO and/or Netflicks … or am I wishfully thinking here?