An Apple Television Is a Very Stupid Idea

After the latest Apple TV rumor, an analyst claims—once again—that Apple will make a 40-inch TV for $2,000, perhaps with integrated apps, gaming and iPhones/iPad connectivity. If true, that would be a very stupid idea.

Gene Munster—a Piper Jaffray analyst whom I can't recall being right one single time—claims that the incoming iTV is just a "stepping stone" to an "all-in-one" 40-inch television that will arrive in 2012. He believes that this television—the real Apple TV—will make $2.6 billion in revenue then, growing sharply to $7.6 billion in 2014. He also says that the device—which theoretically would be just a flat screen with an iOS-based iTV inside—will be sold at $2,000, a big price jump over any HD TV set of the same size.

However, he doesn't provide with any proof, just like the other TV rumors he and others announced—and which never materialized. Moreover, he also fails to answer some crucial questions. He doesn't say what Apple could get from this that they can't get from their incoming iTV device. Or what could Apple win by getting into the cutthroat TV market, just repackaging a TV screen with an pseudo-iPod touch inside. More importantly, he fails to address the win for the consumer.

Why? Because nobody wins.

The big silly box

The argument in favor of the big Apple TV is that, according to some analysts, Steve Jobs & Co. can re-invent TVs just like they re-invented the smartphone or the tablet. They could do this just like they are doing now with their current hardware products: Repackaging off-the-shelf components into nicely designed gadgets and computers, tightly integrated with very good software, all sold with a hefty price margin.

However, things in the TV industry are not in the same state as the cellphone industry was three years ago, when the iPhone was first introduced.

• TVs—no matter how big and advanced—are perceived as silly boxes by the majority of the population, who already owns plenty. They are already in their living rooms and bedrooms, and they use them regularly without any difficulty or problem whatsoever.

• TVs can be a lot of things for many people. It's not the TV that makes the TV, it's what you connect to the TV, what you show on it. For everyone, TV is the movies and programming that comes via air or cable boxes. For most, it's the discs that come in the mail or they buy at Walmart. For many, it's also their game console. For some, it's the box that streams TV and movies from the internet too. TVs are already the hub.

• Big TVs are also expensive appliances that most people already own and don't change regularly. Unlike phones, a large TV will have a long life in your home theater.

• People expect their TVs to be able to show everything they want, not just a limited set of material (an Apple television will be walled and subject to censorship).

Given those circumstances, it will be hard for Apple to make a strong case in favor of a new $2,000—or probably more—TV set, no matter how magical it is.

An Apple Television Is a Very Stupid Idea

The little smart box

Apple doesn't need to make expensive big boxes when they can make inexpensive little boxes that could turn all TVs into iOS-based Apple TVs. One simple device that can turn any TV into an iTV. In fact, what really makes sense is to design this box as a bridge between your TV and your iPhone, iPod touch, and iPad?

• For Apple, this solution is the better option from a marketing point of view. It's way cheaper to produce, distribute, and support. It will also have a higher margin and could sell in much bigger numbers than a $2,000 television.

• For consumers—especially for the more than 100 million people who already have iOS devices now—it's also the best option: An inexpensive way to enjoy the same features of their beloved iOS devices in the big screen. Netflix, Hulu, and Apple movies and series delivered through wireless, cloud-based music services, iOS applications tied to your iPhone and iPad, a huge amount of games with the graphics levelof a Playstation 2... all happening on your current TV as an extension to your current iOS device.

So, while perhaps there is a real TV in Apple's future, it really doesn't make a lot of sense compared to the rumored alternative. As an iPhone and iPad user, I know I would never buy a $2,000 Apple TV, but I will definitely buy an iTV to connect to my flat screen or projector. I'm sure that Apple would rather tap into their existing 100 million iOS gadget users than fighting for a space in the soulless TV shelves of Best Buy and Walmart.