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One Ring to Rule iTV?

By Rachelle Dragani MacNewsWorld ECT News Network
Apr 4, 2013 1:55 PM PT

The long-awaited Apple TV set will finally hit shelves this year, accompanied by a controlling ring and a smaller portable screen, according to analyst Brian White at Topeka Capital Markets.

One Ring to Rule iTV?

After a tour of some of Apple's supply chain stops in China, White wrote in a note to investors that the launch of the "iTV," as he calls it, will happen later this year. Apple plans on unveiling a 60-inch set with a price between US$1,500 and $2,500.

The price would depend on how many accessories came with the set, according to White. Apple is planning on launching the TV with what the company would call an "iRing," a ring that would allow users to control the screen with gestures. The ring's technology would be similar to another rumored company product, an Apple smartwatch.

In addition to the ring remote, Apple would also include what White referred to as a "mini iTV," a small, portable screen that could display the same content that's on the TV from up to 200 meters away. That way, iTV viewers could grab the mini-screen and carry it with them to continue viewing content.

At 9.7 inches, the portable screen would be the same in size and shape to an iPad, but would lack its functionality, so it would not serve as a tablet replacement.

Several cable providers offer similar services by allowing users to connect content to devices they already own, such as iPads or smartphones, for remote viewing.

Cracking an Existing Market

If Apple does attempt to make a dent in the TV market, it has a challenging road ahead of it, said Peter Koeppel, founder and president of Koeppel Direct.

"Apple has the brand recognition and reputation for producing high quality and innovative products, combined with cutting-edge design elements," he told MacNewsWorld. "However, this is a low margin business and Samsung is a formidable competitor, so I don't feel it will be easy for Apple to gain market share in this category."

Unlike its launch of the iPod or iPad, where it unveiled products that no one knew they wanted or needed, Apple would be attempting to produce a device in a market where several competitors have built a solid foundation. What's more, it won't be for the kind of profit that the company usually enjoys when it sells gadgets, said Jia Wu, senior analyst at Strategy Analytics.

"Apple would have to do something really significant to change the market," Wu told MacNewsWorld. "If they do a normal launch with a TV product, with a large display and higher resolution in an affordable price range, the profit won't be significant compared to their existing market. They're making billions, or tens of billions with mobile devices, but a TV can only contribute about one billion per year, and it adds a lot of work and complexity to the company. And they have very tough competition."

Much of that competition could come from Apple's favorite sparring partner, Samsung. Not only is the company one of the most established and recognized names in connected home devices, it also has a growing ecosystem, with Android's popularity on the rise, said Jeff Kagan, tech analyst and consultant.

"The marketplace has been expecting an Apple iTV entry, which is taking much longer than expected," he told MacNewsWorld. "In the meantime, Samsung is moving ahead rapidly in this space. The open Samsung system, which uses the Google Android operating system on smartphones, lets you connect with a variety of different devices and manufacturers."

Content Over Gadgets

That means that if Apple does launch a TV, it can't rely solely on the strength of its ecosystem to draw consumers, said Wu. It also will have to do better than simply issue an iRing and a mini screen to make a significant dent in the market.

"There's an industry idea that people watch TV, they don't want the TV," Wu pointed out. "In the gadget industry there is more of a focus on the electronics and the novelty, and Apple does that well. But with TV that plays a smaller role."

Instead of developing iRings or smaller screens, Apple should focus on the content side of the industry, said Wu.

"An a la carte Apple iTV isn't that attractive," he said. "To have to make users buy content piece by piece, or subscribe to expensive cable deals, takes away a lot of the appeal. Apple needs to work with content owners and providers to get a deal. That's the only way there's going to be major value in this for Apple."

No matter what the company does launch, its brand name and reputation will draw some customers. If Apple can capitalize on that buzz and work with content providers to make the iTV an attractive total package, the company has a chance at carving out its place in the TV market in the long run, said Wu, but that's going to be a years-long job.

"If the product is good enough and they continue to innovate it, they might have a decent user base and eventually change the content industry to be friendly to the Apple ecosystem," he said. "That might change cable or pay TV, but it's not going to happen in one or two years. If it works, this is going to be a long and gradual process."

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