Gene Munster gives up the Apple Television ghost

“Piper Jaffray analyst Gene Munster is weighing in today with his views on Apple Inc., as the tech giant gave up on any plans to make its own television as long ago as last year, according to a Wall Street Journal report,” Scott Fields reports for Smarter Analyst.

While it is a small consolation that the article affirms that Apple was actually working on a television during that period, in the end we were wrong in our constant expectation of the product. Originally we had expected that content was the reason for the delay; however, we misidentified the true reason for delay, which was a lack of perceived killer features as reported by the WSJ. We incorrectly assumed that a combination of Siri, FaceTime, a TV app store, and PrimeSense based motion control could be compelling enough as a unique feature set for the device. Given how adamant we have been about the reality of an Apple television, it’s hard to accept the reality of no Apple television. Our latest thinking prior to this story was that Apple would launch a television in 2016. Based on this report, we no longer expect a television to launch indefinitely. Given that overall investor expectations for a television were low and Street estimates did not reflect a television, we believe there will be no sustained impact to shares of AAPL. — Piper Jaffray analyst Gene Munster

Full article here.

MacDailyNews Take: Gene got one wrong. He admitted it. He remains one of the best Apple analysts on the planet.

Related article:
Behind Apple’s move to shelve their UHD TV project – May 18, 2015

25 Comments

  1. Apple can accomplish everything they need to do with a box attached to any TV. The TV itself is irrevelant, it is the box that will drive it – the content, the controls, etc – that matters.

      1. I agree, I think developing TVs to use in a trial along with their box/service plans was very likely for it would show in practice what and what could not be achieved with an external device as opposed to an internal solution to the betterment of both solutions. But the former most surely was the emphasis for development the latter most likely a test bench or bench mark to determine potential advantages or disadvantages of each solution and whether a particular hardware standard needs to be produced for TVs to best exploit whatever they have planned for their box.

    1. And this was Munster’s fundamental flaw in his constant predictions: He stated it clearly, that he thought some combination of FaceTime, Siri, a TV app store, and gesture commands would be the trump card. But when you think about it, none of those items really creates a paradigm shift for the TV. I never believed in his reasoning, and thought that Apple would only come out with a TV when it had something completely different.

      A TV is really nothing more than a giant display. No matter how many “smart” features Samsung and Visio build into their TVs, the reality is the magic of TV is dependent on what we connect to it: Cable, DirecTV, TV, Netflix, Blu-Ray, internet, etc. I have thought all along that an expanded TV made more sense, with gaming built in, better costs for content delivery, etc.

      The truth is that beating cable and DirecTV in price per content is very, very difficult when offering a la carte programming. Netflix, HBO, Hulu, etc. all have various content providers under exclusive agreements, so to have the same breadth of content gets very expensive. Apple’s real opportunity to shake up TV is in creating a new way for content to be discovered, delivered, promoted and paid for. Breaking content providers away from the ad-supported model currently used will be extremely difficult.

    1. Actually, it’s the royal “we” as used by Her Majesty the Queen. Seeing Munster’s referral to himself in the third person speaks volumes on how most Wall Street analysts view themselves.

      Is it just me, or does anyone else think that an analyst’s job is to crunch numbers, and not play Nostrodomus? But then, if you’re Nostrodomus, you knew that I’d say that…

  2. while there is still room for a new bread of TV set with a lot of possibilities where Apple could innovate. I think they need to get the ATV software and eco system a lot better before making the leap to the hardware part.

    1. The typical TV is a very durable good. Trying to make the box itself smart is foolish, since the smarts will advance much more rapidly than the screen. Many TVs went through VCR and DVD before ever needing a new screen. Many more are doing those formats plus BLU-RAY. Better to focus the smarts off-board and let the screen be the best commodity product that it can be, which is not Apples prime territory.

        1. Precisely. Everyone claiming that Apple TV needs to be a separate box from the monitor should explain why they think a non-upgradeable iMac is such a great idea. It really isn’t.

    2. She thinks there will be a new bread of TV butter thinking is wrong. Her TV was bred with a smart phone and now she has some kind of half breed device.

  3. Apple can justify selling iMacs with monitor because they can increase the resolution and quality of the display and the content is provided by the OS so they can tailor it to take advantage of that. On a TV you’re limited essentially by the content provided by others and the delivery mechanisms available to obtain that content. There’s not a lot of room for adding extra functionality – at least not at the level Apple would require to justify a premium price tag. I’ve never thought Apple would remotely be looking at making a TV and that’s before you even factor in all the different broadcasting formats around the world which would have to be factored in are something I can’t see Apple being bothered with accommodating.

  4. Apple could still build a full TV with the ability to use a swappable card or circuit as the brains. I don’t think that would be very hard to do. I’d think it would be quite cost effective for Apple to use a swappable card.

    However I’m perfectly happy with using the current design of AppleTV to move around from one display to another. Paying $100 for each streaming box isn’t very expensive to me. Apple might charge more for their new streaming box but even if it’s $150 that’s OK by me. I’d say the pundits are over-thinking this whole TV situation. Apple can do anything it wants to do.

    1. Actually, this is MY scenario where it can happen, down the road a few years. And it has nothing to do with Siri, FaceTime, or apps…

      Step One: Apple creates an alternative Internet-based “TV content bundle.” Rumored for this summer. Customers who can get affordable Internet service (separately) without the “forced” bundling of TV service (from the same provider) buy an Apple TV and sign up. They save money and get a superior user experience.

      Step Two: AFTER Apple demonstrates the viability of its Internet-based TV service, Apple lobbies for Federal regulation that forces the artificial link between Internet service and TV service to be severed. Comcast does it because they can; they have regional monopolies on using the cable connection into the home. AT&T does it because they have the phone connection. They can continue to operate those government-sanctioned monopolies on those “data pipes” into the home (which were established BEFORE Internet broadband was even a consideration), but cannot force customers into accepting the bundling of Internet and TV services through unfair pricing schemes. It is anti-competitive and prevents people from saving money, AFTER Apple creates a competing TV service that can save people money IF they can get reasonably-priced Internet service that is NOT artificially tied to TV service. The forced “unbundling” of Internet and TV services opens the door not only for Apple, but for any TV content provider.

      Step Three: With a well-established TV content service that it controls, Apple releases that complete “Ultra HD” TV set along with an upgrade to its TV service that fully supports the higher resolution. Furthermore, Apple uses the higher-priced UHD TV service to partially subsidize the cost of the UHD Apple TV. Customers agree (with a contract) to pay for Apple’s TV service for at least [a specified period like two years], to buy the UHD Apple TV at an upfront cost that matches or beats the price of competitors’ “dumb monitor” TV sets. The Apple TV mini-box (that attaches to any HDTV to make it “smart”) continues along with Apple’s non-UHD TV service, but does NOT support UHD. Only the UHD Apple TV set can access the only TV service that is optimized for UHD.

      So, the key to Apple eventually releasing Gene’s COMPLETE Apple TV is a successful Internet TV service. It allows partially subsidizing the higher cost of a TV set that is meaningfully better (while still highly profitable) AND matching it with a TV content service that takes full advantage of the higher resolution from Day One.

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