Apple has long inspired one of the largest and most rabid rumor cultures of any company on earth. Potential new products are speculated about at length, sometimes for years. Some eventually come to fruition as shipping products (iPhone, iPad) while others seemingly stay forever in the realm of question marks. For now at least, a television from Apple falls squarely into the latter category.
I do believe that Apple will get into the television business in a big way . The only question is how?
I do not believe Apple will sell a television. The global TV market is absolutely brutal. Commoditization is the order of the day, with 70″ LED HDTVs selling for as little as $1600 on the recent Black Friday and regularly available for under $2000. Think about that for a moment. It's difficult to imagine Apple playing in the low cost end of a pool like this. Margins are razor thin even if there is volume in the market overall.
Now, there are certainly high end models available from some manufacturers (the Sharp Elite line, Sony's HX line, Samsung's 8000 series, etc). However, at $5000 and up for the larger models these are no more than niche products. Collectively they sell in the tens of thousands of units (max) per year. Here again, it's difficult to imagine Apple getting into a space whose volume is so low.
Brutal competition has left the major players on shaky footing. Sharp is teetering on the edge, forced to sell assets and is said to have taken an investment from Apple. Regarding the latter, I think that has more to do with Sharp supplying displays to Apple for other products, not televisions. Samsung has fared better but it has a much broader array of products than does Sharp (eg phones, tablets, appliances, etc).
What about new technologies? At the recently ended CES, 4K “Ultra HD” sets were one of two bright prospects. These sets, with 8 megapixels (4x that in Full HD sets), may ultimately incite the next big TV upgrade cycle, so it's conceivable that were Apple to sell a TV they'd want to ride that wave. However, there is no 4K content currently available. And, these products will also be priced both stratospherically by Sony, Sharp, and Samsung, as well as at the commodity end by Vizio and Hisense. Tough to see much margin lasting very long in 4K.
Then there is OLED, a display technology superior to both LCD and plasma. That has an Apple feel to it. However, yield issues have kept these sets off the market. 55″ sets are finally close to shipping, but for $12000 (!) Even if Apple could commit to volume purchases such that they could sell the sets for half as much, it would still be a niche product, and that also assumes that the manufacturing issues are solved which is not a given.
Added all up, I simply do not see Apple selling a TV. As I said though, they will definitely make a big push into the TV business. Find out how in my next post.