Munster: An Apple TV set by 2011
Gene Munster has seen the future of television and it has an Apple (AAPL) logo on it.
In a note to clients Thursday, Piper Jaffray's senior analyst offered a scenario by which Apple would enter the cut-throat TV market by 2011 with an Apple-branded television set with digital video recording and home media functions (music, movies, games, interactive TV) built-in.
"Yes, TV hardware is a challenging business if you don't change the rules of the game," Munster writes, "but we see potential for Apple to offer best-in-class software and hardware and charge a premium."
The roadmap to Apple television (as opposed to Apple TV), as Munster sees it:
- A new Apple TV set-top box within the next few months, with a TV imput and DVR built in. "With the popularity of ad-based internet TV (Hulu.com) and subscription models (Netflix's Watch Instantly), we believe a-la-carte (iTunes) video purchases have lost share against other video models in recent months. As such, we believe Apple is exploring a subscription-based offering for its TV content in iTunes."
- An iTunes TV Pass within the next year. "Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month). Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels."
- An Apple television set within the next two years that could wirelessly sync with iPods, iPhones and Macs. "Such a device would command a premium among a competitive field of budget TVs; we believe Apple could differentiate itself with software that makes home entertainment simple and solves a pain point for consumers (complicated TV and component systems)."
As evidence for Apple's interest for pushing deeper into the living room, Munster cites: COO Tim Cook's statement last month that the company will continue to invest in Apple TV because "we fundamentally believe there is something there for us in the future"; patents covering digital video recording; and a five-year, $500 million partnership with LG to produce LCD screens.
Munster notes that Apple currently controls an addressable user base of more than 65 million iTunes users and has sold more than 48 million iPhones and iPod touches that could be used as TV remotes or interactive TV game controllers.
"The argument that Apple will not enter the television market because prices have declined by ~70% in the past three years," he concludes, "is a similar argument used to conclude Apple would not enter the cell phone market, given phones had seen similar price declines. The bottom line, 10 million HDTV's sold in the US a year is a real market, and if history repeats itself, Apple will find a way to compete in a commoditized market with a premium priced product."
Munster expects Apple to sell 6.6 million Apple TVs in calendar 2009, up from an estimated 2.1 million in 2008 — an estimate of 3X growth that he believes may be conservative. By his calculation, every addition 1 million units Apple sells adds $.03 to Apple's EPS.
My guess was that the successor to the AppleTV would be ARM-based. They have the OS and knowledge of the platform, due to the iPod and iPhone. The TV could therefore be a possibility as the next platform…
All we want is a 52" iMac to tack on the wall. What can the TV add that the iMac already doesn't offer? Currently i use a mac mini hooked up to my wall mount LCD. This is ok, but I'd like it to be more powerful. They are close here, but just give us the iMac with an enormous screen for $2500 and thats all we need. Good idea with iTunes subscription TV service. combine this with MLB.TV and I'm all set (as long as its in high def). built in webcam is also a must.
Oh, rubbish! Apple doesn't go into a business unless it can offer enough value to change the game – Mac, iPod, iPhone, iTunes, Apple Store have all done that. Exactly what value to a TV could it add that an enhanced Apple TV or Mac Mini couldn't provide? TVs, moreover, are a cutthroat business with razor thin margins, and Apple doesn't mess around in that playground.
ex ped: Munster addressed both those points. I'm not sure he's correct, but it's not as if he overlooked them.
Bill Kunz Oceanside CA:
LED is just a light source. Laptop screens are still LCDs with LED light source.
An Apple TV hooked up to the Apple network through the Apple subscription service. I think not. Plus it will probably be overpriced. I'll wait until Canon gets around to releasing SED tv's even if it is still a while before that happens.
A complete multimedia set for our guest with iMac, EyeTV and Bose Surround Sound has been installed in our guesthouse against the wall combined with satellite TV. Especially for our Dutch guests we have also installed TV Flanders’ Pluspakket digital TV mix so they can receive all the Dutch-speaking channels (and more) in Wirtzfeld Valley. This in addition to 400 other (english, german, french, italian, spanish and oversea) TV stations via the Astra and Hotbird satellites. Our guests can keep in touch with friends and family back home with broadband Internet access connected to this computer, and use WIFI or Ethernet for their own laptop. A Skype Internet telephony account is set up as well as a SkypeOut account and ready to use. Even a webcam for chatting or video conferencing, or to make own digital pictures or video clips is available. An extensive DVD collection and a digital music library are also available.
This is all hype people. Do you think they will make much of a dent with this kind of product. Live TV is still huge and will be for a long time and plus they will have to setup contracts to supply this content and well we all know how Apple is at the negotiating table. I seriously doubt people will want to give up their cable box, in reality its not a complicated as made out to be by some. I know I can setup my cable box in 2 seconds and be watching tv without a problem. One remote for cable box and tv and it works pretty well for me. Most people don't want to search for programming, its alot easier for many to just flip through and find something interesting.
Enough already. I stopped reading CNN's tech section months ago. CNN, stop pretending and just name this section "CNN – we love apple and hate all other tech"
While staying in our condo in the mountains for the summer we have not watched TV once. I swivel my MacPro's 30" cinema display so we can see it from the sofa and switch on my iPhone to run 'Rowmote' (an app from the App Store) that controls Front Row via wi-fi (MacPros have no infrared control). Hulu and iTunes have provided us with all the TV shows and movies we need. I can recommend Rowmote on the iPhone even for iMac users as it is way better than the small remote control Apple ship.
So, what you're saying is that Apple plans to bite the hand that feeds it? How do you think these people get Internet? Over POTS a-la a 56K modem? If Apple makes a successful push into TV content, I'd bet that Cable/Internet providers go to KB-based pricing models in the US.
This wouldn't be very risky, someone mentioned overhead but they wouldn't have any overhead to start, they would outsource production. Eventually they would start making capital expenditures to secure their materials, and then potentially, later they would make their way into more manufacturing ala the rumors with apple chip manufacturing that may never come to fruition.
BTW, please tell me what an imput device is.
I love my Apple TV, although with Netflix's streaming option I don't buy or rent much any more. Good for music and podcasts.
But the problem with dropping one's cable service for Hulu or whatever is SPORTS. How many men are willing to give up live sports broadcasts?
I would probably not by an Apple television, but I would buy an iMac with a 60" screen.
The analogy is similar to the difference between smartphones and the iPhone. A smartphone is a more powerful cell phone. The iPhone is a handheld computer that has a phone attached to it.
Give me a full computer to hang on the wall not just a smart TV. Give me an iMac (or Dell XPS One) with a 60" screen.
Last month for my home office I bought an MacBook Pro 13" 4Gb.
It also has a DVI out so I can connect to a flat panel TV, which I'm going to try out. The news here is I got an Apple Remote Control with it. I played with it the other day, the software is called Front Row, and now I can run iTunes music, pictures, TV Shows, Videos, and DVD Movies with an incredibly easy to use interface. It's the interface stupid!
I love my Apple TV. I don't have cable, so instead I purchase the TV shows (or usually the seasons) that I want to watch when I want to, and again and again if I want. I store them on my Time Capsule's 1TB hard drive.
Plus I use my Apple TV for renting HD movies (no more DVD rentals… and no more buying DVDs for that matter). Plus using it to play my iTunes music, view my digital photos and of course audio and video podcasts. It's all when I want it without commercials (which my wife and I love watching shows commercial free) which just may change how TV shows are edited.
Must have been a slow day at Piper Jaffrey. I don't see Apple entering the TV set market at all. It will make improvements to its set top box, but Jobs and company are too smart to enter this low margin game. And 500 million Apple devices in the world? We passed that number 5 years ago, at least.
I would pay a premium for an Apple remote to control my home theatre system. With just one button to push and all the menus on-screen…
It's not the TV function so much but away to have an instant GAME machine also, the iPhone or iPod becomes the control, watch out Xbox, Nintendo, etc apple is ready to pounce.
Yeah. In the same way would someone pay a premium for an apple-branded cellphone just to be able to make calls and take pictures. Duh.
"All things are connected". All things Apple that is! Just ya all watch when there are 500mil Apple devices throughout the planet! Think about that for a few seconds.
I don't think that Apple is likely to sell branded televisions, but I could certainly see the company making a push into the market by enhancing the capabilities of AppleTV, which would allow them to enjoy all of the benefits of actually branding a TV but without the overhead. Limiting themselves to providing such services to people who will pay a premium for a television would be a mistake.
Imagine an AppleTV unit that offered DVR, gaming options, video streaming through multiple services (or even just a subscription-based iTunes service), internet radio, a digital TV-tuner, and (dare I say) BluRay support. If you could get live broadcasts from local networks and pay $40/month for unlimited access to iTunes video library, then why have cable or satellite service? If they could offer something similar to the NFL Sunday Ticket so that I didn't miss any live games, I'd sign up in a heartbeat!
I always have to laugh at these predictions. Some of these features are already being incorporated into TVs. And 6.6 million Apple TVs sold in 2009? How are they coming up with these numbers? And sorry, but streaming internet video to your TV still isn't as good as HDTV from cable or satellite.
The current crop of TV + cable box is overly complicated to use. There are a bunch of remote controls that somehow try and address this solution but I think what is needed is someone like apple to come and change the game and introduce something that my grandparents can figure out how to use.
Let this happen, oh please. We, in our home, so hate regular TV but feel forced to subscribe because of the few shows that we want to watch. An Apple subscription service would facilitate our making the big break. I already know a few people who have cut off their TV services and exclusively use Apple TV.
I am not a fanboy although I own a Ipod and macbook. Who is going to buy a apple TV that will likely be 50% more expensive than a comparable plasma? Just to watch Hulu and movies from I-tunes?
It would be silly for Apple to enter the TV Market. I wouldn't be opposed to a large table Macintosh that I would use to stream video from the internet, but not a whole tv. We already hook up our Mac mini to our wall mounted LCD above our fireplace. With sites like NBC.com and Fox.com, the HD video is better than what I used to get with a cable box. By wall mounting our Mac Mini with a wall mount from HIDEit Mounts my guests cannot tell the difference. Someone else mentioned MLB.TV if you add in CBSSports.com we can get almost everything in high quality.
We havent paid for cable since Feb 09.