Should Apple Launch a Television?
A television would eat up a lot of retail space in Apple’s stores.
Last May, an analyst poured cold water on rumours of an Apple television. Pacific Crest analyst Andy Hargreaves’ argued: “An Apple television would be a terrible use of retail space relative to iPhone, iPad or the Apple TV set-top box. A 46in Apple television would likely generate less than 1/200th the gross profit per cubic foot as an iPhone at retail, and less than 1/50th the gross profit per cubic foot of an iPad.”
In other words, a television takes a lot more space up in store than an Apple TV set top box, and that’s space that could be used to sell other Apple products.
There’s another reason why an Apple television may be a drain on the company’s profits. According to NDP DisplaySearch, TV sales have stagnated over the past two years, and growth is expected to be slow in the coming years. As proof of this, in 2012 Panasonic announced it was pulling out of the TV market, while earlier this year Philips announced it was moving out of the home consumer market.
Why Does Everyone Think it’s a Good Idea for Apple to Reinvent the Television?
Smart TVs are selling, but we aren’t smart enough to use them.
Whether it turns out to be a lucrative market or not, all eyes are on Apple to fix it, and if the company doesn’t do anything relating to television this year, it’s likely to disappoint many and, perhaps unfairly, attract criticism.
The fact is, a lot of people think that Apple should reinvent the television. Back in September 2011, Jean-Louis Gassée, a former president of Apple’s products division, said that a television has “got to happen”.
The reason why everyone is looking to Apple is that television needs fixing, and we all know the company is good at fixing usability issues. Just take the way it revolutionised the smartphone and before that the MP3 player. In an echo of the days before the iPod and the iPhone, consumers are purchasing Smart TVs but they aren’t using the ‘smart’ features. According to research group NPD, only 15 per cent of Smart TVs are being plugged directly into the internet, and barely any apps are being used via the TV.
Last September similar research, from Quixel Research, found that while about 30 per cent of those surveyed own internet-enabled TVs, they rarely use this web connection. “Despite thousands of available apps, digital content is only being streamed by 50 per cent of these owners, on a daily or weekly basis, and more than 80 per cent said this content was being used just for playing movies,” according to the company.
While Smart TVs are selling, people aren’t using them to connect to the internet. Most likely this is because the user interfaces are so poor, and that’s where many are hoping Apple will come in. It’s hoped that the company’s tradition of advanced design, innovative features, simple interface, convenient usability and easy connectivity, will encourage consumers to take the next steps in accessing media from their televisions.
Another reason why consumers are not using their televisions to their full potential may be the state of their broadband connection. A Wall Street Journal report last year suggested that “lagging investment in fixed broadband, rather than the failure of Steve Jobs to ‘solve’ TV, is the real thing propping up the existing TV model.” In other words, the current model for television delivery hasn’t changed because the infrastructure doesn’t exist to support it, not because Apple hasn’t launched its own smart television.
Once broadband is sorted, “expect the TV and broadband businesses to reorganise themselves overnight”, wrote the Wall Street Journal.
There’s no doubt that there’s a market for television sets. The question is, can Apple really do for television what it did for the music industry with the iPod? And, if it delays, will someone else get there before it?
Do People Really Want an Apple Television?
A survey by Quixel Research last September found that 88 per cent of Apple customers, and 80 per cent of all current flat-panel TV owners, in the US would be interested in buying an Apple television. It didn’t take into consideration how much it would cost, though.
However, a survey we carried out online at Macworld.co.uk found that 65.4 per cent of voters think Apple should update its set-top box, rather than create a television set. Of the 760 respondents, 38.3 per cent said they want a set-top box with apps, games, catch-up services and live TV recording features. Of the individual features, the most popular was integration with catch-up TV (iPlayer, 4OD, and the like). Second in popularity was the inclusion of iOS Apps, and the ability to record live TV also figured.