“If Tim Cook is to fully take reins from Steve Jobs, he’ll need to bet the company on his own grand product vision—one that suspends investors’ disbelief without affecting Apple’s stock price,” Steven Max Patterson writes for Quartz. “Apple’s next big product will have to be television and because of the barriers to entering the television market in the US, Apple will need to make its introduction in another world market, and China appears to be the best alternative.”
“Apple needs a new product category that matches its $170 billion annual revenue scale. Inventing an entirely new and untested product category like watches and wearables can’t generate large gains and fuel Apple’s growth. So its only option is to disrupt a very large existing industry with its product design prowess and brand,” Patterson writes. “A big splash in the $400 billion worldwide television market will reestablish Apple as an innovator and tantalize its investors and observers with growth prospects that match its scale.”
Patterson writes, “The iTV (as some have called it) will first appear in China because the country has millions of the right consumers, an abundance of television content, and a partner in China Mobile that has an abundance of radio spectrum to wirelessly deliver television to mobile devices and to the living room.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]
There is so much nonsense in this article it’s almost funny…
beyond inane.
Beyond asinine, really.
A large product doesn’t necessarily mean large margins. It sucks to be in the television making business. Big time.
“I am a complete imbecile,” Patterson continued. “I have no imagination and find it hard to connect dots on paper, much less in the realm of human events and business.” “It’s true,” said the elder Mrs. Patterson. “Sad but true.”
What Patterson really does understand is that Asia in general is the largest market for Apple products.
Just because the lowest 50% of Asians will likely never be Apple customers in my lifetime does not mean the top 50% will not be Apple customers before 2020.
Apple does realize this and the rate of sales of Apple products in Korea, Taiwan and Japan portend great sales numbers from the rest of Asia.
After all, does a middle class person in Asia want to buy a POS cellphone he will have to replace every year or two because it falls apart somehow or can’t or won’t be upgraded or will that person want to buy a quality item that will last for 4-5 years and have top quality software and apps.
Image also counts highly in Asia. If you are using ‘the best’ you are viewed as being in a higher status position.
Hence, Patterson is on the right track
Apple still won’t be making a TV for sale. The margin for TV manufacturing is in the single digits. Apple doesn’t roll that way.
China is probably the most competitive and price driven market in the world. The only thing China has going for it is large numbers, people that is. 1% of a billion [people] is a larger market than 3% of the US market. That said I highly doubt Apple will get into dumb TV sales unless they can deliver a 4k TV for less than others.
Hey MDN, you forgot to put “or something” at the end of the headline.
When I read this, all I hear in my head are armpit farts and slide whistles.
This might make sense if Apple can simplify the interface and create the infrastructure that is pushing high quality video and better programs. My IP TV is OK, a bit confusing, but there is nothing to watch. PPTV app is good but the video quality sucks. Youku is infested with commercials.
Superficially it makes a lot of sense. But then you look at the idea from a non delusional perspective and you realise that Apple has no understanding of the Chinese TV market and trying to introduce a new concept to test there would be incredibly difficult.
It is highly unlikely that the Chinese Govt would want a foreign particularly Western company having any real control in such a market.
It would in very difficult circumstances show the hand of the product/concept and model which others will then be able to introduce elsewhere on an equal basis to Apple as and when it is feasible. Markets it would far prefer to be working in first to develop the whole thing.
Technical hurdles would most likely be pretty high in a country that increasingly wants to set standards and go its own way.
The more successful t was if it did manage to progress there the more suspicious and controlling the Government would wish to be. It is hardly going to give its citizens free access to all thats on the internet as Google found out.
I applaud your efforts to refute the piece, but you have to realize where the incentive to vomit this onto the Interwebs comes from:
Has every sane analyst said the Apple Television makes zero sense on Apple’s product roadmap? Were they correct in asserting that too much of the control of content was out of the company’s hands and that TVs have always been a razor-thin margin sector not worthy of another hardware-maker?
Why not try it in a market where most analysts are unfamiliar? One just different enough to count as a novel idea and big enough where in some parallel universe it could make sense. One like… China!
This is simply another silly permutation of a bashed-dead plot line, constructed purely for clicks, mostly by people who want to tell the author what an idiot he is.
Welcome to the AdSense Economy, brought to you by Google.
If China had more than one content producer, this article could have made sense.
Sorry but iTV will hardly be Timmys original baby (no offence intended) since Steve by his own words already “cracked it”
There are no margins, at least not by Apple’s standards, in making TVs. They cost too much to make, so prices are so high that people don’t replace them as often as they do computers, tablets and phones, so there is no turn over.
So that means they could sell a consumer a television about once every 5 years at 10-20% margin, or, they could sell that same consumer an AppleTV every two years at 35% margin, letting the consumer choose whatever TV set they want, and sell to a much larger base, because the cost of entry is just $100, instead of several hundred up to a few thousand, and you know that with Apple it would be more likely in the thousands, if they made one.
Math, it’s a bitch.
TV and movies will not be delivered over WiFi, and certainly not cellular, for a long, long time. It’s too slow and cellular is too expensive.