Wednesday, March 24, 2010

Apple introduce its own HDTV? I think not

An analyst report by Piper Jaffray's Gene Munster is getting some traction. In it, he predicts that Apple will release an Internet-enabled $2,000 HDTV in the next two to four years. I don't buy it, at least not in the way that Munster foresees. Here's why:
  • Companies have been building HTPCs for years, and no one has made any significant headway in the market.
  • Apple TV has been on the market for several years, and it's never gotten past the "hobby" stage for Apple.
  • HDTVs are almost commodity products, and it's going to be extremely difficult for Apple to make the kind of hardware margins that it targets and be price-competitive.
I believe that Apple's best opportunities are to rethink Apple TV and open it to non-Apple content, and to add more video to the iTunes store and make it available on every device that Apple sells. Whether that means that Apple and the iTunes store will replace cable, satellite and IPTV operators remains to be seen. The business challenges are far more daunting than the technical ones.

If the FCC mandates that cable operators switch to software-defined set-top boxes and drop CableCARD, I can easily see a next-generation Apple TV that does everything that today's set-top boxes and DVRs do, plus internet connectivity to the iTunes store and to third-party content providers. I don't believe that Apple will get into the HDTV display market.

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