April 18th, 2012
Like everyone else, I’m waiting to see what Apple does in the TV space, but this bit of cold water, which predicts that an iTV isn’t going to happen, makes some cogent observations:
One reason is that TVs are an extremely competitive, commoditized market with very slim margins and most purchasing decisions going to whoever has the most features. You can draw some parallels to markets that Apple’s doing well in, like smartphones and computers, but Apple has chosen only to serve the high end of those markets. How big is the high end of the TV market? How many people are willing to spend a significant premium over the competition for a TV?
It causes practical problems, too: TVs usually require large warehouses and very large retail display areas, which Apple’s retail stores aren’t ideal for. And large TVs usually require in-home service, which Apple doesn’t offer for any other products. . . .
A bigger problem is that Apple prefers to offer fully integrated products, but a modern TV is just one component in a mess of electronics and service providers, most of which suck. Apple doesn’t want their beautiful, it-just-works TV to need to interact with Onkyo’s 7.1 HDMI-switching receiver, Sony’s 3D Blu-ray player, Microsoft’s game system, Comcast’s awful Scientific Atlanta HD DVR, Canon’s newest camcorder, the photos on your point-and-shoot’s SDHC card, and your Logitech universal remote. (The need for TVs to have a more complex remote than the Apple TV might be fatal alone.)
But the real kicker is this:
But the biggest problem that I suspect will keep Apple out of the TV business forever is much more basic:
How often do people buy new TVs?
Apple’s primary business is selling computing devices and related hardware, with healthy margins and tightly integrated experiences, to customers who generally replace them with the newest models every 1-3 years.
There’s no place for them in the TV market, and they’re content (and smart) to stay out of it.
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