Analyst Says Big-Screen Apple TV ‘Makes Little Sense’

Apple TVEver since Walter Isaacson published his best-selling biography of former Apple CEO Steve Jobs, the tech industry has been buzzing with the possibility of an Apple-branded television set, which was one of Jobs’ dreams.

Jobs famously said, “I’d like to create an integrated television set that is completely easy to use. It will have the simplest user interface you could imagine. I finally cracked it.”

That simple comment set the rumor mill in motion, and since then, we’ve read claims that are believable – Apple has a prototype, to claims that are entirely suspicious – the Apple television set is already in the works.

While many industry analysts have predicted the release of the “iTV” in 2013 or 2014, some have become skeptical. Back in December, Richard Gardner of Citigroup told investors, “Apple has not even defined specs yet.” In February, Ben Reitzes of Barclay speculated that Apple was focusing on TV content partnerships rather than a TV set.

This morning, Andy Hargreaves of Pacific Crest has added to the skepticism, with two new arguments that he pointed out to clients.

He believes that an Apple television set would be of little value without concrete, unique TV content to go along with it, and cable companies are understandably reluctant to sign deals with Apple. Providing Apple with content would potentially risk existing revenue, making an iTV an unlikely prospect.

Hargreaves also believes that an Apple television would be a poor use of Apple’s retail space compared to the iPhone, iPad, and Apple TV set-top box. According to his calculations, a 46” Apple television set would generate less than 1/200th the gross profit per cubic foot of an iPhone, and less than 1/50th the gross profit per cubic foot of an iPad, measurements that are critical because of the limited inventory space at Apple’s retail stores.

You have to admit, these are compelling arguments. While I’d like an Apple-branded television set, I still don’t believe that Apple is going to produce one. What do you think? Are we going to get an iTV or is it all just rumors and wishful thinking?

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  • Dpen00

    It’s wishful thinking. Don’t hold your breathe..