Speculation - Should Apple Enter the TV Business?

Discussion in 'Apple, Inc and Tech Industry' started by rdowns, Sep 25, 2006.

  1. rdowns macrumors Penryn


    Jul 11, 2003

    Why Apple Will Enter - And Win - the Flat Panel TV Market
    Monday September 25, 9:16 am ET

    Carl Howe (Blackfriars Communications) submits: Thursday's Wall Street Journal noted that companies like Office Depot (NYSE: ODP - News), Home Depot (NYSE: HD - News), and RadioShack (NYSE: RSH - News) are branching out into flat-panel TVs. With companies like Circuit City (NYSE: CC - News) and Best Buy (NYSE: BBY - News) reporting robust profits driven by flat panels, we shouldn't be surprised at these retailers suddenly embracing flat panels.

    But the recipe for flat panel HDTV success is complicated. Dell's (NASDAQ: DELL - News) HDTV business, for example, has basically flopped because of poor quality and even worse marketing. H-P's (NYSE: HPQ - News) flat-panel business is similarly floundering. This isn't the PC business where a few component choices and low prices drive mass adoptions; it requires equal parts of stylish design, consumer marketing, differentiation, and high-technology support. Retailers are not going to find success by outsourcing those key differentiators.

    And the big box retailers aren't necessarily an answer. Why? Because any big box retailer like Home Depot isn't just going to carry the best flat panels. They are going to promote choice for consumers, and that means the typical big box video wall of TVs. The only problem: that is nothing like the typical consumer's living room, and that means a lot of consumers will make poor choices for their homes, especially under the watchful gaze of the commission-driven sales person. That means dissatisfaction, returns, and lost profits.

    But it is a different story for Apple (NASDAQ: AAPL - News), just as music and PCs were. Apple has design icon Jonathan Ive (among many other great designers), one of the best and most powerful brands in the world, incredible differentiation, and is repeatedly ranked number one for product support. It has a chain of 161 stores that generate 67% of the revenue of Best Buy with 10% of the floor space. And most importantly, Apple sells experiences, not low-priced hardware. They'll offer two or three choices to avoid the tyranny of too much -- and amaze everyone again by making more profits on fewer products.

    We saw Apple's iTV set-top box last week, showing the company has targeted the living room as its next frontier. A $299 set-top isn't going to boost Apple's revenues to new heights, but beautifully designed, elegant flat panels would. And such products at stylish stores would extend the company's reach far past computers and iPods into a wide swath of consumers who just aren't going to drop $3,000 or more in a high-touch lifestyle purchase at Home Depot.

    In my view, it's not a matter of if Apple will enter the flat panel market; the only question is when.

    Update: Apparently, I'm not the only one who thinks this. John Montellaro over at The Mac Observer just wrote an article that comes to a similar conclusion from a different set of premises.

    Disclosure: Author owns shares of AAPL
  2. pianoman macrumors 68000


    May 31, 2006
    i would buy an Apple TV if it was reasonably priced.
  3. rdowns thread starter macrumors Penryn


    Jul 11, 2003
    Reasonably priced. Surely you jest. :D
  4. Bobdude161 macrumors 65816


    Mar 12, 2006
    N'Albany, Indiana
    Jester you are.

    But yeah, Apple needs to stay within it's realms. If it starts to venture off doing other projects what will happen with the quality of it's main products?
  5. CEAbiscuit macrumors 6502a


    Jun 28, 2006
    The Kitchen
    If the TV had unique features that enchanced my viewing experience.... BAHHH!!!

    Apple may be late to market here, so if they decide to make a run at the TV marketplace, Apple needs to do something to set themselves apart. In my book, to compete with my Pioneer Plasma, Apple TV's better be:

    HUGE Razor Thin Plasmas
    As good to look at off as on-most plasmas are just ugly.
    A picture near perfection
    Wireless out the wazoo: Audio, video, desktop and laptop connectivity -
    Make the thing easy to hang on my wall.

    As far as cost goes, who cares- just make the highest quality TV you can. If you are going to spend $2500 on a plasma, you might as well spend $4000+ to get the best of breed.
  6. MisterMe macrumors G4


    Jul 17, 2002
    This is an even dumber idea than the iPhone and has been discussed about as much. Gateway was No. 1 in the market for plasma flatscreen. It abandoned the market because it could not earn a profit. It has already been pointed out that Dell is not doing well in this market. HP recently jumped in, but does not seem to be setting any sales records. What Gateway, Dell, and HP all have in common is that they got into the TV set/monitor business to shore up flagging computer sales. OTOH, Apple is on the ascendency. The flatscreen business is not. Last year, HDTV sets and monitors saw prices drop like a stone. This year, they are dropping even faster. Currently, these sets are being sold with incentives very much like SUVs. Just this past weekend, I bought a new Sanyo. Sears gave me a 10% discount on the already low price. Long story short, Apple enters this market if it wants to take a bath.

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