I’ve said it a number of times that I do not expect Apple to get into the large screen TV business. There are a number of sensible reasons for this, one of which is the fact that this is a heavily-saturared market with companies already rushing to exit the business.
Now I suppose some of you could say the same about the mobile phone industry, but Apple picks and chooses its markets carefully. Rather than just built another boring handset, or a handset with a few flourishes, they chose to fill the perceived gaps in the smartphone space. That’s why the iPhone is such a great product not just for consumers, but the enterprise as well.
When you examine TV sets, yes it’s true there are higher-end contenders there as well, products that offer large plasma or LCD screens and loads of extras, such as Netflix streaming. But most of the people who used to buy such gear are starting to look at the entry-level, partly because it’s hard to pay the price for more expensive gear, and also because picture quality is pretty good across the board among most major brands, regardless of product position.
That’s a major reason why VIZIO catapulted to a top spot among LCD TVs in the space of just a few years, although they aren’t building plasma TVs anymore, because that market is declining. VIZIO is actually a small company physically although their reported revenue is in the billions of dollars. Founded by former PC industry executives, from Gateway and other companies, VIZIO quickly discovered that the way to success was to give you a product with good reliability, offering near as much picture quality and features as the high-priced spread. Indeed, they are credited with saving you lots of money, because the mainstream companies, such as Panasonic, LG, Samsung and Sony, realized that they could move a lot more units if they cut prices to the bone.
That, of course, is what they do in PC land. Take commodity hardware and compete mostly on price. With flat panel TVs, most of the basic hardware, such as the display components, are sourced from the same small group of OEM makers. A company need only add their own custom setup menus, a handful of uniquely labeled features that perform essentially the same functions as the competition’s uniquely-labeled features, the requisite brand name identifiers to the case and suddenly they’ve got a brand new product.
Playing the commodity hardware game is not Apple’s cup of tea, which is why they earn good profits from every piece of hardware they sell. Even the slow-moving Apple TV is certainly delivering sufficient earnings to keep the product going, even if it remains, as Steve Jobs says, “a hobby” that is evidently waiting for a purpose.
Would that purpose be flat panel TV?
All right, it’s true that the new iMacs, with their 16:9 widescreen displays, are flat panel TV monitors, to which you merely need to attach some sort of input element to receive broadcast, cable or satellite TV. Then again, with more and more TV content moving online, maybe that’s not necessary for some viewers who don’t need a selection of 350 stations at their beck and call.
I suppose, then, that Apple could just take the iMac, bundle an Apple TV, inflate the screen size to the proper 42 or 50 inches, and they’ll have a first-rate set with picture quality way ahead of most of the competition. Of course using premium grade displays means that, with such large sizes, the price will also be considerably higher than the TVs you usually find at a Best Buy or a Wal-Mart. I wouldn’t pretend to hazard a guess, but the $1999 27-inch iMac with the Intel Core i5 CPU might be twice as expensive with a bundled Apple TV capability and a 50-inch screen.
Would Apple be able to sell a few million of those machines each year in order to justify the investment?
Just as important, how would an Apple Store handle such a physically immense device? Yes, the 27-inch iMac comes in a pretty imposing box, as you might expect. But having helped set up large screen TVs that I received for review, or at the homes of friends and relatives, I can tell you that stock rooms and shipping departments have to be seriously revised to accommodate such products.
Yes, Best Buy and other retailers specializing in appliances and large screen TVs know how to handle this category of merchandise. Apple could learn as well, although their current retail outlets don’t seem suited.
It may be, of course, that if Apple built an entrant into this market, they would either ship directly to the end-user, or work strictly with third-party retailers that are appropriately equipped to ship and install such gear.
At the end of the day, I just don’t see it. Remember that the iPhone, another product people said Apple couldn’t deliver successfully because of the crowded marketplace, is competitively priced with most of its serious contenders. An Apple flat panel TV would only be able to compete in a very exclusive marketplace, and the question is whether there’s room for another player, even if the screen was truly better, and the product was more feature-laden.
Apple would certainly have some fascinating interface ideas to offer, of course. But I just don’t see it happening.