Forget the iPhone, is the Apple TV Coming?
Apple is Hinting at a Rollout of a new Television Product
Aug 21, 2009
Gene Munster, a Piper Jaffray’s senior analyst who covers Apple has made a bold proclamation. The future of the television business may change as we know it. In the same way that Apple’s iPhone revolutionized the Smart Phone market, Apple could do the same for the television business.
Just Around the Corner
In a note to his clients, Gene Munster stated that Apple would enter the competitive TV market by the year 2011 with a television made by Apple. This television would also not just be any old TV, but a set with a digital video recording device and various home media functions including music, movies, games and interactive television) all built right into the set. He alerted his clients that “we see potential for Apple to offer best-in-class software and hardware and charge a premium.”
What new Products would Lead up to the Apple TV?
While everything is still in the speculative phases, Munster offered some ideas that might be released shortly before the culmination of the Apple TV. These speculative ideas include:
- Releasing a new version of the Apple TV set-top box within the next several months. This set-top box would include a TV input jack and a built in DVR.
- An exclusive iTunes Pass. This pass would act as a replacement to the consumer’s cable bill by offering access to current and older shows on the major broadcast channels. This allows the consumer to cherry pick their content.
- The Apple Television within two years time. But it won’t just be any old TV, it will be a TV that sync with everything apple. This includes iPods, iPhones, Macs and other potential Apple product lines.
The road map to the Apple TV seems to make a lot of sense, and could mean a lot of money for Apple investors.
What’s the Evidence behind the Proclomation?
Munster looked to the words of Tim Cook, the COO of Apple, from a statement he made last month to make his guess that Apple would move into the TV marketplace. Tim Cook said “we fundamentally believe there is something there for us in the future.” By “there” he meant the patents they hold covering digital video recording technology and their $500 million alliance with LG to make, drum roll please, LCD screens.
Munster goes on to note that Apple has access to more than 65 million iTunes Users and has sold more than 48 million iPhones and iTouches. These products might not just integrate with the product in any old way, but might actually be the remotes for the televisions.
What’s the Bottom Line for Investors?
Munster expects Apple to sell over 6.6 million set-top boxes in this calendar year. That’s more than 3 times the growth from the previous year. Doing a little math, Munster estimates that every additional set-top units that Apple sells will ad $.03 to Apple’s earnings per share.
Sources
For more information, check out the article at CNN Money by Phillip Elmer-Dewitt. The article is entitled "Munster: An Apple TV by 2011?" and was published on August 20th 2009.
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