Apple finished out 2014 without so much as a whiff of the new Apple TV - which means the next generation, whether it comes in the form of a revised set top box or actual television sets or both, won’t see its release date until its next media event in the spring of 2015. That represents not only a break in Apple’s usual pattern of updating the product in the fall, but also opens the door to speculation as to what’s taking Apple so long and what its roadmap really is for the product going forward.
There is every reason to expect Apple to continue offering some version of its current set top box. While the product isn’t as widely known as some of the company’s other products, it’s a low-price high-margin device which can lead customers to turn around and spend more money in the iTunes Store on movies and the like. Even if Apple does bring out its own television sets, there is little strategic reason for Apple to abandon its attempt at reaching those who have already invested hundreds or thousands in a TV set from another vendor - at least for the next few years, giving those consumers the opportunity to reach the end of their current set’s lifespan and before being steered toward an Apple Television at that point.
But there are also several reasons, some evidence based and some empirical, to expect Apple television sets to happen. One is that it gives Apple greater control over some living rooms. The second is that it strikes at the heart of bitter rival Samsung’s TV-set-based living room strategy, where Samsung dominates. But there is also the fact the late Steve Jobs all but admitted Apple’s plans to launch TV sets in his posthumously published biography. Finally, with smart televisions a growing and lucrative market with plenty in the way of hardware innovation but little in the way of software interface innovation, Apple has an opportunity to deliver a best-in-class (or at least most-intuitive-in-class) product and cash in accordingly.
Just don’t look for Apple televisions to debut at Walmart style prices. One need only look at the Apple Watch, which was just unveiled with a price tag starting at $349 and going up from there, for guidance on Apple’s ongoing strategy to debut its new product categories with premium models at premium prices, and then later on gradually introduce more budget models to reach a more price-oriented market (also see the iPad’s evolution into the iPad mini for reference).
We’d be shocked to see the first generation Apple television sets arrive with a price tag at any less than $999, with an $1199 entry point more likely. Apple may initially partner with an existing TV set vendor to produce the Apple-branded product, as Apple’s initial focus on the product will be in software. That partner could be virtually anyone in the industry except Samsung, which Apple continues to go out of its way to avoid doing business with due to ongoing intellectual property disputes. Samsung’s rival Sharp would be the most likely candidate. Eventually Apple can be counted on to phase that partner out in favor of delivering entirely in-house models, as has been its pattern on various product lines. It’s also possible Apple may acquire a second tier TV manufacturer entirely, in the name of streamlining the process.
Jake Robison
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