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Apple world’s most valuable company. Its next trick? TV

Tuesday, August 9, 2011 · 5:07 pm · 63 Comments

“When I spoke with Sonos Chief Executive John MacFarlane last April, he had a simple observation about Apple,” Brian Caulfield blogs for Forbes. “The bigger Apple gets, the bigger it needs to get.”

“And right now, Apple’s as big as it gets, surpassing oil giant Exxon Mobil Tuesday to become the world’s most valuable company,” Caulfield writes.

MacDailyNews Note: Exxon Mobil retook the lead before the markets closed today. Apple’s market cap stands at $346.74 billion, Exxon’s is $352.90 billion.

Caulfield writes, “Like Apple, MacFarlane’s company builds boxes — in his case networked home stereo systems — so he knows the terrain. His theory: Apple will have to attack the $100 billion television business next.”

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Comment Feed

63 Comments

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GriffinFX

Tuesday, August 9, 2011 - 5:12 pm · Reply

When will this stupid rumor die? It’s hard to see how Apple makes *boatloads* of money selling TV’s.
- _Bill_
  
  Tuesday, August 9, 2011 - 5:32 pm · Reply
  
  Right. Any rumors about an Apple TV are false or Apple ordering LCD’s for monitors, not TV’s.
  
  It seems so unlikely that Apple would sell TV’s; although, I can see Steve Jobs at home trying to navigate TV setup menus and thinking, “We can do better than this.” Apple products turn people into UI snobs.
  - Peter Blood
    
    Tuesday, August 9, 2011 - 8:25 pm · Reply
    
    UI snobs? Well put. And why not demand the best from all facets of media. I have Time Warner cable service and their HD DVR cable box is horrible. It’s slow, clunky, the favorite channels feature is totally unusable, and the UI sucks donkeys and unlike Apple they rarely upgrade the software. It’s like they think one size or upgrade fits all and good enough for another ten years! Bring it on Apple and teach these cable clods a thing or two. It’ll be the mother of all wake up calls.
  - Robert
    
    Wednesday, August 10, 2011 - 7:24 am · Reply
    
    “Apple will have to attack the $100 billion television business next.”
    
    It is interesting how many people think they know best how Apple should be run. I agree with Bill here about the fake TV rumours but then he has to add that last statement about UI snobs. You sure know how to shoot your argument in the foot.
    
    Apple insists on creating better software and improving the UI so that computers are more intuitive and usable. Bill sounds like someone who can only learn something once and clings to it no matter how flawed it is. Learning is fun Bill. This is what separates us from many animals and plants.
    - S. Balmy
      
      Wednesday, August 10, 2011 - 12:12 pm · Reply
      
      Taxonomy snob!
- sjezebel
  
  Tuesday, August 9, 2011 - 6:00 pm · Reply
  
  When will the stupid inability to see the value in these rumors die?
  
  The digital living room ecosystem currently has a big gaping hole in it- the TV. HDTVs are very nice but essentially little more than an advanced version of the TV that was created in the 40s and built on a tech paradigm that’s a hundred years old. They’re as antiquated as wristwatches, calculators and stand-alone alarm clocks. All consumer electronics devices now need to have an OS, a processor, RAM, apps and complete wire/wireless connectivity. Whether Apple builds their own sets or incorporates their tech into another’s remains to be seen but to outright dismiss the notion of evolving the TV concept into this century is unequivocally myopic. The hardware and the industry that drives it is basically junk by today’s standards. And Apple has proven time and time again that people didn’t know what they were missing in a given area until Apple innovates in that area. Why should Apple abandon their MO now?
- vanfruniken
  
  Wednesday, August 10, 2011 - 5:08 am · Reply
  
  pff, in many countries, including mine (Belgium), you can’t even get the AppleTV from the Apple Store. It’s not even a hobby anymore.
  
  When will there be content available outside of the US, UK, France, so that they can continue their hobby?
MacBill

Tuesday, August 9, 2011 - 5:16 pm · Reply

Not gonna happen. Ever. Apple doesn’t even have enough physical space in their stores to sell televisions. This is just the rumor that will never die. Plus, Apple is interested in selling things that are smaller & lighter, not bigger & heavier.
- correctu
  
  Tuesday, August 9, 2011 - 5:30 pm · Reply
  
  Perhaps Apple will use the space that was used for retail boxes of software.
- ken1w
  
  Tuesday, August 9, 2011 - 6:01 pm · Reply
  
  Apple Store has a Sony HDTV on display, to demo the current Apple TV. So they would just replace that Sony HDTV.
  
  I think it will happen eventually. Apple sells iMac and Mac mini. One is a complete system, the other uses a third-party display. Which one would Apple rather sell you? An iMac, because there is more profit per unit by selling a complete system. And that’s why Mac mini is designed and marketed to be clearly inferior in terms of specs (although the new ones are pretty nice), and there is no other mid-range “headless” mini-tower Mac model that is equivalent in specs to iMac (not counting that new education-only iMac model).
  
  In the same way, I think Apple will want to sell you the complete TV, not a $99 add-on box. A $999 HDTV from Apple will bring in ten times the profit per unit. The $99 box will continue, but that’s why Steve Jobs keeps calling Apple TV a “hobby.” It becomes NOT a “hobby” when Apple releases the REAL Apple TV.
  - Flibbity Floo
    
    Wednesday, August 10, 2011 - 1:17 pm · Reply
    
    Bad math. Margin on TV’s is MUCH smaller. Profit will not increase commensurate with retail price.
- Adam B
  
  Wednesday, August 10, 2011 - 10:55 am · Reply
  
  Next time you’re in an Apple store, look up. They already have large flat-screen TV’s hanging from the walls, showing off products, services, and the queue for the Genius Bar. It wouldn’t take a major shift to move a set or two down to a lower space and stick a price tag on it.
  
  I’m not saying they will, just that they could.
DTL

Tuesday, August 9, 2011 - 5:21 pm · Reply

@ GriffinFX: you do know there is a thing called an App Store, right? iTunes?
- GriffinFX
  
  Tuesday, August 9, 2011 - 6:55 pm · Reply
  
  @DTL WTF does that have to do with Apple selling TV’s and this rumor?
  - DTL
    
    Wednesday, August 10, 2011 - 7:45 am · Reply
    
    Don’t you think an Apple-made TV will have iTunes and apps offered on it? An Apple TV would be just like an iPad, which is like an iPhone, which is like an iPod.
    
    Apple will make a boat-load of money by offering better-integrated services for movies and such. An Apple TV would make all current DVRs obsolete.
    
    Seriously, you don’t think Apple owning the living room will make them money? Seriously?
Deus Ex Technica

Tuesday, August 9, 2011 - 5:26 pm · Reply

Watch this:

1) Apple completes negotiations with the major studios for broad streaming licenses of television and feature film content [well underway - almost complete].

2) Apple releases APIs for iOS developers to create applications for AppleTV. All of a sudden, every iPhone and iPad becomes a game/content controller [most likely well underway].

3) Apple updates hardware in AppleTV to support new iOS (with applications), 1080p output, deeper iCloud integration and who knows what else. Priced aggressively, these things warp off the shelves, crushing the settop box market with its dominance [most likely well underway].

4) Applet hen sells an “AppleTV on a chip license to every major television manufacturer, so they can claim “AppleTV Inside!” on the spec sheet [they already design their own custom chips. Easily plausible].

There you go: Apple sells televisions without making a dent in their inventory…
- iApple
  
  Tuesday, August 9, 2011 - 5:42 pm · Reply
  
  Nailed it.
  - ob1spyker
    
    Wednesday, August 10, 2011 - 12:26 am · Reply
    
    Apple is in the business of creating the hardware that the software runs on. This is Steve Jobs’ mantra! No way they license this to Sony or Samsung or the like.
- pridon
  
  Tuesday, August 9, 2011 - 5:47 pm · Reply
  
  Or they integrate a pico projector into the Apple TV box. No need for the 100 pounds of related TV heft.
  
  I agree – no room in the stores for TVs. Also, Sony and Samsung not making money in TVs (Sony hasn’t for 6 years). No pricing power in the market.
  - ob1spyker
    
    Wednesday, August 10, 2011 - 12:38 am · Reply
    
    No room for TV’s in the stores??? How many TV’s so you think they need on display? They will probably only make one model with only the most popular sizes available (3 maybe? 27, 42, 55?) Apple seems to focus on 90% of market and lets the bottom 5% and top 5% either go else where or change their paradigm. Besides, I don’t know about you but I haven’t been in a tiny Apple Store yet. There is PLENTY of room available especially with all the software coming out of the stores.
- Engineer
  
  Tuesday, August 9, 2011 - 5:58 pm · Reply
  
  What a breath of insightful analysis! By jeeves, I think you might be onto something!
  
  Only thing is, I think Apple doesn’t license the crown jewels, and the crown jewels are software. I can see Apple licensing a chip, and with software requirements… but would they change their business model here?
  
  It would be a profitable business, and Toshiba, Sony, et. al. would be very happy to outsource the software development (which they suck at) in exchange for using reference designs (which they wouldn’t’ care about) and try to win on manufacturing (which they are good at, presumably).
  
  Just not sure Apple would change their model. But if they do, I think you’ve nailed how they’re going to do it.
- iharry
  
  Wednesday, August 10, 2011 - 11:36 am · Reply
  
  MAN you nailed it with these 4 steps!
Walter Cronick

Tuesday, August 9, 2011 - 5:33 pm · Reply

Apple, via iCloud, is in the position to light up the best television network ever: The Internet.

Apple TV is mearly a hardware hook to this network.

Will Apple need to manufacture TVs to change the face of Broadcast Television? Probably not. It’s the network that counts most. iTunes demonstrated that both content and distribution are king. Apple will simply apply the iTunes model to television. A new way to see the world is born.

Stay tuned..
Boss Dog

Tuesday, August 9, 2011 - 5:35 pm · Reply

I’d prefer to see Apple license Apple TV software to television manufactures.
Applet hen

Tuesday, August 9, 2011 - 5:46 pm · Reply

Intel will fabricate the chipset and then the TV manufacturers can put on a sticker that reads, “Intel AppleTV Inside”. There, that should appeal to both sides. Done.
- JonM
  
  Tuesday, August 9, 2011 - 6:38 pm · Reply
  
  Apple would never do this. They pay more just so their computers aren’t all stickered.
Laughing_Boy48

Tuesday, August 9, 2011 - 5:49 pm · Reply

I don’t think that Apple needs to keep branching out but needs to continue strengthening what it already has. Once a company grows in size with lots more employees, it’s probably a lot more difficult to control. I’d like to see Apple improve AppleTV but I’m fairly certain Apple is being hamstrung by the media content studios. Also, Apple would probably do a lot better if they could turn AppleTV into some sort of a light gaming console for the casual gamer.
Hugh Massengill

Tuesday, August 9, 2011 - 5:51 pm · Reply

Not if, but when. The future will see only one platform survive, at least when it comes to big screens. Either Apple makes a computer/tv that plugs into the wall and does everything, or some other company surpasses them when it does. It is easy to put an iMac’s guts into a 55 inch LED, put a pull down platform in the back for hard drives, iPod connection, etc.
Hugh
- Eldernorm
  
  Tuesday, August 9, 2011 - 10:50 pm · Reply
  
  You do have to sell a tv to do great tv. Keep all the control in an Apple TV type box. That way. ANY tv becomes an apple tv.
  Just a thought
  - eldernorm
    
    Tuesday, August 9, 2011 - 11:51 pm · Reply
    
    Opps sent from iphone. Should read “You do not have to sell a tv to be able to do great tv”
    late. time for bed.
Jubei

Tuesday, August 9, 2011 - 6:06 pm · Reply

I would be happier if Apple fixes Apple TV 2 dropping Home Sharing connection constantly. Really getting old fixing this on a daily basis now.
- JonM
  
  Tuesday, August 9, 2011 - 6:42 pm · Reply
  
  The light on mine randomly turns on. TV on or off.
dude mcfarland

Tuesday, August 9, 2011 - 6:11 pm · Reply

Ah yes the age old “you have to keep growing”

What a crock.
All you really need to do is make great products which turn a profit.

Everything else will work itself out just fine.

Growth is a number that only serves wallstreet returns anyway.
Once a company makes their stock price the metric of success the downhill ride starts imho.
macromancer

Tuesday, August 9, 2011 - 6:16 pm · Reply

Remember when every time someone wrote about Apple they put the word beleaguered in front of it? I had almost forgotten about that.

Bring on the TVs!!!
vsp

Tuesday, August 9, 2011 - 6:40 pm · Reply

If Apple were to enter the physical TV market, it would be better that they license their TV software to manufacturers that are capable of producing great products. Choose between 5–10 premium manufacturers only and not any crap manufacturers. TV is a commodity product that Apple should not directly enter. Leave the crap manufacturers to Google.
MacWarrior

Tuesday, August 9, 2011 - 6:54 pm · Reply

The next logical move might Hulu, it’s web based, safe enough, and will fit into Apple’s world quite easily.
ob1spyker

Tuesday, August 9, 2011 - 7:00 pm · Reply

An Apple Television is an inevitability.
G Spank

Tuesday, August 9, 2011 - 7:27 pm · Reply

The “not gonna happen, ever” people are fools. It makes perfect sense that Apple wants to put the Apple TV inside a TV!!!! Look at the iMac, fools. Apple put the computer in the screen. Why? Because Apple likes simplicity. DUH.
trondude

Tuesday, August 9, 2011 - 7:41 pm · Reply

No way. 2 things come to mind, first, apple doesn’t support blu ray, and second, apple price point would be high. People won’t spend 3-4K when they could get a comparable LED TV for half that. It just doesn’t make sense to enter that market.
- ob1spyker
  
  Wednesday, August 10, 2011 - 12:19 am · Reply
  
  What does Apple not supporting blu ray have to do with this? You honestly think Apple would make a physical media combo tv? As far as I know all the blu ray player needs to do is hook into the HDMI port. There is nothing Apple needs to support. Second, why does the price point matter? Does it matter with Apple’s current product portfolio? Has it stopped them from surpassing Dell, Intel, Google, Microsoft, and briefly Exxon in market cap? People currently have access to vastly less expensive PC’s however they are increasingly choosing the Apple alternative. Seems to me there is somewhat of a parallel there.
  
  Apple doesn’t need to be the market leader in a category to make money. I can see them approaching this like they approached the iPhone. Even a small part of the pie, especially at the margins they will charge, will still net them a nice profit center. They will then go on to build a product that will exceed industry expectation and cause yet again another disruption in the marketplace.
  
  Apple’s key asset is not the products they make but the rabid fan base they have cultivated since the 80′s. They will look beyond the price and see the quality and actual value of an Apple Television. Others will line up behind them due to the halo effect products like the iPod, iPhone and now iPad has had on had on the perception of the company. Whether it’s a hobby or a full court press there will be people who will buy it.
  
  I don’t think this is a question of if, more like a question of when or at the very least why not?
Peyo

Tuesday, August 9, 2011 - 8:05 pm · Reply

Actually, TVs are dead already.

The only valid tools to aggregate all possible sources of video+audio have to be sophisticated computers with a trivial UI. Something like an Apple TV (or competitor).

Then all you need is a display and a sound system. You want higher quality video and audio, you spend more money on the display and the sound system (which do need to be a single item, mind you).

And the display can be a glorified 60-inch monitor, a projector, a tablet on your lap.
- omalansky
  
  Tuesday, August 9, 2011 - 9:58 pm · Reply
  
  “Actually, TV’s are dead already.” Peyo
  
  Perhaps, but big-screen living room displays are most definitely not dead. The center of most people’s entertainment universe is not going to migrate to the computer screen; and for most people, the iPad is strictly a secondary viewing device for video.
  - Applesmack
    
    Wednesday, August 10, 2011 - 2:45 am · Reply
    
    The iPad upgraded and in various screen sizes can be the basis of Apple TV from a personal curret iPad size to larger screen sizes.
    
    Uniform software and apps- pick your screen size. Hold it in your lap or mount it or put it on a stand etc.
    
    I will opt for the smaller highly portable sizes. When not watching TV I will use it for graphics work etc. It will also be the computer for many people. On the other hand having several may also be a good option.
    
    Apple will make good deals on components and once again bring to market an Apple TV with features, at a price, that other manufacturers will find hard to equal.
    
    The iPad and it’s it’s progeny and siblings will become the computer, the TV, the informatin display etc etc. Where ever there is a use for a screen in personal life or in business, think iPad.
    
    The real revolution is coming.
  - Peyo
    
    Wednesday, August 10, 2011 - 5:14 am · Reply
    
    Sure, that’s what I meant with the “glorified 60-inch monitor”. A huge display on your living-room wall, which is only one option you have to view a program. Sorry to have been imprecise.
    
    And that is only one option. Protocols like AirPlay will allow you to move seamlessly between all of your installed displays/audio-systems.
Davidcur

Tuesday, August 9, 2011 - 8:45 pm · Reply

Apple wont do a TV. What they should do is a new device. A combination reciever — timecapsule– ATV. It has a high quality low power amplifier section like something NAD would do. It has a hard drive or 2 to backup all your idevices and computers.It stores all your content andcan stream to all devices with wifi, ethernet or Thunderbolt. It has apps and games. Then build wireless game
controllers like the PS3 has and gaming would explode. Use the ipad or iphone/ipod touch to control it. You would have an entertainment system that JUST WORKS. Use any TV that you want and if you want Bluray just plug one in. I think the possibilities are endless. I don’t knownif there would be any limitations by the content providers with including a DVR but I think would be a problem area. I know I would want one. Oh yea, just ” one more thing” its all connected with icloud. Come on Apple, we are waiting.
What would we call such a thing?
Davidcur

Tuesday, August 9, 2011 - 8:48 pm · Reply

And this thing would have the profit margins Apple loves.