“Carl Icahn makes a pretty compelling case for why Apple should get into the television market,” Ian King reports for Bloomberg. “The billionaire investor says people spend a quarter of their free time watching TV, and that the market, which he says is worth about $575 billion, excluding advertising, is more valuable than smartphones.”
“Sounds nice on paper, but the reality is that the economics of building a TV set are very different from those of mobile phones or laptops,” King reports. “The key difference is that the entire product essentially hinges on one component: the display. In many TVs, the screen accounts for about 80 percent of the production cost, according to data compiled by Bloomberg. In a smartphone, it’s about 20 percent, says market research firm IHS, which leaves plenty of room to differentiate with other features.”
“People tend to choose TVs based on picture and price,” King reports. “Apple doesn’t make its own displays, so both factors would rely almost entirely on whatever ones it can procure from a competitor in Asia. Perhaps that, more than the lack of exciting new features, is why Apple put an end to its efforts to develop a TV set last year, according to a report in the Wall Street Journal.”
Read more in the full article here.
MacDailyNews Take: Apple is simply sticking with the philosophy that made them the world’s most valuable company:
When Apple looks at what categories to enter, we ask these kinds of questions: What are the primary technologies behind this? What do we bring? Can we make a significant contribution to society with this? If we can’t, and if we can’t own the key technologies, we don’t do it. That philosophy comes directly from [Steve Jobs] and it still very much permeates the place. I hope that it always will. – Apple CEO Tim Cook, March 18, 2015
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Behind Apple’s move to shelve their UHD TV project – May 18, 2015