Some reports suggested that Apple Inc. (NASDAQ:AAPL) is planning to offer a new online streaming service in addition to the update to its Apple TV Box during Apple Inc. (NASDAQ:AAPL)’s Worldwide Developers conference in June. But does this also include the plan of making the TV set on its own? A Wall street Journal report on Monday suggested that Apple Inc. (NASDAQ:AAPL) had already shelved its plans to make its own Apple TV set almost a year ago. Apple Inc. (NASDAQ:AAPL) was planning on making a $4,000 TV set with advanced features. But, why did Apple shelve this plan? The New York Times Columnist, Nick Bilton and Piper Jaffaray’s Senior Analyst, Gene Munster talked on CNBC about the reasons behind Apple’s decision to shelve the TV plans.
Apple was looking to add advanced features to its TV Set like Ultra HD, in built Camera to enable Video Calls, etc. But Apple Executives did not see the features compelling enough to enter the highly competitive TV market. Bilton pointed out that he was following Apple’s TV plans from 2011. He said that he started covering this story as he was speaking to Steve Jobs Biographer, Walter Isaacson. He mentioned that according to Isaacson, Jobs was pretty much into making a TV set with the idea of ‘Siri’ controlling the instruction to TV instead of a remote. He said that Apple had built dozens of TV prototypes. He added that some of these prototypes includes stuff like touch TV, wall embedded TV, etc. But he said that Apple had shelved all the options considering the fact that TV market is a cut throat market with competition from big names like Samsung and Sony.
One major factor behind this Apple’s decision might be the fact that the margins are thin when compared to a iPhone or a iPad. People would happily buy a $2,000 iMac but would hesitate to buy a $4,000 Apple TV.
“that’s completely correct. And the other thing is that you have the margins, if you did a $4,000 Apple TV, you would have a million nerdy kids that would buy everything Apple, but that’s just a million people. Apple is going after much bigger market. And I think the other thing is the TV market is changing a little bit, but not enough. Traditionally people buy a TV once a decade and with Apple products people buy a iPhone every year, people buy a iPad every year, they buy a new laptop every year and they don’t want to get into a market where they are waiting ten years for their consumers to go out and spend a couple of thousand dollars on TV,” Bilton said.
Munster was among the people who believed that Apple would make a TV set. Munster said that he was very disappointed at hearing the news that Apple shelved those plans. He pointed out that it’s a hard reality to accept. He questioned that the Apple’s strategy for living room is unclear as they ditched the TV plans. He said that in spite of the fact that the TV has bigger replacement cycle with lower margins, it plays a huge role in the living room.
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