Apple’s TV Won’t Be a TV

By

appletvelephant

 

The people who believe Apple will sell a TV set are right. And the people who believe Apple won’t sell a TV set are also right. Here’s why.

Apple’s TV Won’t Be a TV!

Apple’s rumored TV set has been in the news a lot lately.

Digitimes reported this week that Apple is looking to make a deal with either LG or Sharp to manufacture 55- and/or 65-inch Ultra HD TV panels for a future Apple TV set.

We also heard a rumor that Apple intends to offer a premium TV service that enables viewers to skip commercials, and that Apple will get around the cable-companies’ anxieties by actually paying them extra for commercial skipping.

Some are speculating that Apple will give each media company its own app.

We also learned that Apple’s existing Apple TV product has a whopping 56% of the market already.

The social media arguments over whether people believe or don’t believe Apple will ship an actual TV set tend to be limited by narrow thinking about what a TV is.

For example, one argument against the prediction that Apple will sell a TV says that TVs are commodity, low-margin consumer products.

Another says that people keep their TVs for too long for any of this to make sense.

Taken together, the problem with a TV for Apple is that the company wouldn’t make money on them because they’d make too little profit for each set and sell too few of them too infrequently to make a difference in Apple’s overall business.

Another line of thinking suggests that Apple is in the business of making “smart” devices, and that TVs are “dumb.”

I believe all these points of view are rooting in past-thinking rather than future-thinking.

What TVs Will Be In the Future

Whether Apple ever makes a TV or not, it’s clear that TVs are evolving into Internet-connected computers that run apps, do videoconferencing and do a number of jobs far beyond just showing TV shows.

Here’s another way to think about TV.

The two main things people do with phones, tablets, laptops and desktops these days are content consumption and communication. Because of the large screen size, smart TVs offer the best content consumption and communication experience for consumers.

And look at all the things people connect to TVs: Xbox and Playstation video game consoles; cable boxes; and increasingly home automation systems. Because of its fixed screen and centrality in the home (usually a living room or bedroom), smart TVs and their peripherals offer the most sophisticated computing applications most consumers use (gaming and home automation).

Looking at the Big Picture (pun intended) and dropping obsolete stereotypes about what a TV is, the TV really should have the most compute power of any other device you own, not the least.

In other words, a TV shouldn’t be less of a computer than your computer, it should be more.

Apple likes to think about “experiences.” Specifically, they historically find bad content consumption and communication experiences that many people are suffering through, and introduce products that create great experiences.

This is what they’ve done with music players, phones, tablets, laptops and desktop computers.

As the TV becomes the best, most important and most central content consumption and communication experience in the lives of consumers, does anyone really believe Apple is going to sit on the sidelines? Does anybody really believe that Apple is fine with letting Google, Microsoft, Samsung and Sony own the most important content consumption and communication experience?

I think it’s clear that the Apple television will actually be a really big iPad or a really big iMac.

The only problems to be solved, really, are two.

The first problem is distance. Each type of computing device is used at a different distance, from phones, tablets, laptops and desktops, the distance between screen and eyeball gets larger.

The TV distance is so great that new interfaces beyond touch have to be included. In Apple’s case, these are likely to be Siri, in-the-air gestures, remote controls and phone and tablet control.

The second challenge to be overcome is obsolescence. People aren’t going to buy a 4K TV every two years. They might buy one every four years. Some will wait longer.

I don’t believe that’s as big a challenge as some have described. A good model to consider is the console video games market. Microsoft is on an upgrade cycle for the Xbox that lies somewhere between 8 and 10 years. The PlayStation is similar.

Apple could probably do better than that. One could imagine a new version of the iTV coming out every six years, five years or even four years.

The cost for an iTV would be high. For example, Sony’s LED 4K Ultra HDTV runs about $7,000.

If you assume that Apple will have more powerful electronics inside, which would raise the price, but have it manufactured starting, say, a year from now and at vastly higher scale than Sony’s, which would lower the price, a $3,999 or $4,999 iTV isn’t inconceivable. And the price would consistently drop from there.

Note that just eight months ago, the cheapest 4K TV cost nearly $20,000. Prices are dropping very fast.

The bottom line is that, no, Apple will never ship a dumb TV. They’ll ship a very powerful, internet appliance computer and call it a TV.

More to the point, all the content consumption and communication features available on smaller Apple devices will be available on the iTV — iCloud, FaceTime, etc. And the iTV will do things smaller devices can’t do — distance user interfaces, console-quality video gaming, etc. And they’ll probably always have an Apple TV box that brings most of the functionality of their iTV to any TV.

In other words, the iTV will be just another beautiful, powerful, elegant Apple computer, and we’re all going to want one.