Apple TV Set by 2011?

Gene Munster has seen the future of television and it has an Apple (AAPL) logo on it.

In a note to clients Thursday, Piper Jaffray's senior analyst offered a scenario by which Apple would enter the cut-throat TV market by 2011 with an Apple-branded television set with digital video recording and home media functions (music, movies, games, interactive TV) built-in.

"Yes, TV hardware is a challenging business if you don't change the rules of the game," Munster writes, "but we see potential for Apple to offer best-in-class software and hardware and charge a premium."

The roadmap to Apple television (as opposed to Apple TV), as Munster sees it:


A new Apple TV set-top box within the next few months, with a TV imput and DVR built in. "With the popularity of ad-based internet TV (Hulu.com) and subscription models (Netflix's Watch Instantly), we believe a-la-carte (iTunes) video purchases have lost share against other video models in recent months. As such, we believe Apple is exploring a subscription-based offering for its TV content in iTunes."
An iTunes TV Pass within the next year. "Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 to $40 per month). Such a product would effectively replace a consumer's monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels."
An Apple television set within the next two years that could wirelessly sync with iPods, iPhones and Macs. "Such a device would command a premium among a competitive field of budget TVs; we believe Apple could differentiate itself with software that makes home entertainment simple and solves a pain point for consumers (complicated TV and component systems)."
As evidence for Apple's interest for pushing deeper into the living room, Munster cites: COO Tim Cook's statement last month that the company will continue to invest in Apple TV because "we fundamentally believe there is something there for us in the future"; patents covering digital video recording; and a five-year, $500 million partnership with LG to produce LCD screens.

Munster notes that Apple currently controls an addressable user base of more than 65 million iTunes users and has sold more than 48 million iPhones and iPod touches that could be used as TV remotes or interactive TV game controllers.

"The argument that Apple will not enter the television market because prices have declined by ~70% in the past three years," he concludes, "is a similar argument used to conclude Apple would not enter the cell phone market, given phones had seen similar price declines. The bottom line, 10 million HDTV's sold in the US a year is a real market, and if history repeats itself, Apple will find away to compete in a commoditized market with a premium priced product."

Munster expects Apple to sell 6.6 million Apple TVs in calendar 2009, up from an estimated 2.1 million in 2008 — an estimate of 3X growth that he believes may be conservative. By his calculation, every addition 1 million units Apple sells adds $.03 to Apple's EPS.

http://brainstormtech.blogs.fortune.cnn.com/2009/08/20/munster-an-apple-television-set-by-2011/

I didn't know where else to post this and it was very intriguing. I've always thought Apple would eventually get into this business. Depending on the price, this would definitely be something I would be interested in.

"Such a product would effectively replace a consumer's monthly cable bill"

Don't think for a minute the cable companies like that idea one bit.

Why oh why do we have to read posts from this moron!! He makes stuff up and has no inside information. Apple will never enter that market.

Intriguing, but we all know how accurate analysts are...

"Such a product would effectively replace a consumer's monthly cable bill"

Don't think for a minute the cable companies like that idea one bit.

To completely replace cable and satellite TV, Apple would need to work out a deal with the major sports leagues to stream games for a reasonable price. Until that happens, I still need cable. I would get blacked out from my favorite teams in I didn't watch them where they are now.

I have worked with Apple/Mac products since 1989 and love Apple and the Mac.

However, there has been a marked decline in the quality of their products in the last 6 or 7 years. I attribute this to Apple's explosion of new products/markets and the dilution of their core design team as the best and brightest are pulled into new organizations and Apples hires more and more engineers from other SW companies (e.g. MS) who bring their PC ideals of quality with them.

I predict that as Apple continues to expand that Apple Quality Control will converge down to be no better than MS Quallity Control. Hope not, but it appears headed in that direction.

I hope they don't ultimately become a victim of their own success.

So let me get this straight: this guy says that Apple MIGHT do this? This isn't even a rumor!

This just in: Apple MIGHT enter the automobile business. Can you imagine getting into an accident with the unibody Aluminum iCar? One fender bender at 4MPH and it's totaled. The whole thing would need to be replaced.

i wouldnt hold your breath.

so because he saw a couple of ideas from a patent of apples and a short quote he jumped to the conclusion that its going to happen? this is just stupid

iTunes subscription = highly likely

iTunes should be competing for the dollars people spend on their cable bill. They'd be doing a lot better in this department if they made a set top box that wasn't crippled and featureless.

Apple Television = not for a loooooong time, if ever.

The people who would buy this TV already have an HD set. Most TV's last decades, unlike cellphones which last 2-3 years on average. I'd rather see them make an AV receiver before they made a TV set... They can't even get the AppleTV right yet.

Let's work on what you have, Apple before you start branching out too far from what you know...