Waiting for Apple to Charge the Gates of TV Land
JP Morgan analyst Mark Moskowitz isn't holding his breath for the arrival of an Apple TV set. Such a product won't come until at least 2014, according to his forecast. Much of that prediction is based on economic factors, but other industry analysts say another powerful force is in play: the messy, tangled web of agreements between content rights holders that Apple will need to cut through.
May 4, 2012 5:00 AM PT
Speculation about Apple producing a television set that will revolutionize how we watch entertainment at home has been percolating for months, as has the arrival time for the super set.
Initially, it was predicted to arrive in time for the 2011 holiday season; then it was going to share the stage with the new iPad in 2012; and when that didn't happen, it was pushed to sometime in 2012 or the first half of 2013.
Now, one analyst is predicting the spectral set won't appear before 2014. In a research note released Thursday, J.P. Morgan Securities analyst Mark Moskowitz observed his research hasn't found "any looming TV-related product launch."
In fact, he predicted another generation of Apple's set-top box, Apple TV, will appear before the super set makes it to prime time.
Apple did not respond to our request for comment on this story.
Economy Doesn't Mean Squat
Moskowitz argued that the current economic climate may not be the best time to launch a premium TV set, but that notion was challenged by NPD Group analyst Stephen Baker.
"That has absolutely nothing to do with it," he told told MacNewsWorld. "Economics, economic climate, none of that stuff means squat."
"Apple will come out with the product when it has a hardware and content solution that gives them the margins that they want and enhances the overall ecosystem in a way that it believes is valuable," he explained.
Apple TV set critics often point out that margins in the market aren't up to the company's double-digit tastes, but Baker discounted that contention, too.
"Just because a lot of other people aren't making a lot money on TVs doesn't mean Apple won't," he said.
Get Ready, It's Coming
One long-time champion of the Apple TV set has been Gene Munster, a senior research analyst with Piper Jaffray. Munster has had to change his predictions for the arrival of the set several times. His latest prediction is the first half of 2013.
"The part about the timing is the hardest part of this," he told MacNewsWorld. "The question 'Is Apple working on a TV?' isn't a question. It is [coming]."
He added: "To me, whether it's the first half of 2013 or the back half of 2013 or the first part of 2014, it doesn't matter. The TV is coming."
Hardware, though, is only part of the Apple TV set story. There's a content component, too.
"One of the problems with television is access to content, and it's a mess," Rob Enderle, president and principal analyst with the Enderle Group, told MacNewsWorld.
"It may well be that the current administration at Apple is looking at this and saying it's not going to really get cooked for the next couple of years," he reasoned. "Once it does get cooked, then we can bring out something with as powerful a back end as we have with iTunes music and the iPod."
That may be a wise decision, he maintained. "The situation is so ugly, it's hard to believe that anybody can be successful there," he explained. "Google TV crashed and burned. Apple TV [set top box] is arguably the best product in its class but underperforms at Apple."
In two years, conditions in the content market could be more favorable for an Apple TV set, he contended. "Right now, access isn't where it needs to be," he explained.
"In one or two years, the guys who own the content will recognize that they have to solve the access problem if they're to get the most money from their programming," he said.
Munster agreed that content continues to be a snag for everyone trying to take home entertainment technology to a new level. "The climate needs to thaw with content owners before we get real content availability online," he said.
"The content question is going to be an evolving question for the next decade," he predicted.
However, that doesn't mean Apple will be wringing its hands for 10 years waiting for a perfect world for content distributors.
"It can do things around content that are innovative within the existing content infrastructure," Munster said. "They can do things that are innovative, that aren't being done today, and that will make its TV unique."