Why The Apple HDTV Rumour Won't (And Maybe Shouldn't) Die

It's a rumour as insidious as cicadas and even more annoying: the Apple Television. Not another Apple TV box. A full-fledged, high-def, wall-mounted monster straight out of Cupertino. And while it's always seemed unlikely, the murmurs and the rumblings won't stop. Is it possible that this time they're actually onto something?

First off: where did this Kraken even come from, and why it keeps emerging? Patient Zero is Piper Jaffray analyst Gene Munster, who back in March of 2010 wrote that a $US2000 Apple HDTV was a certitude. We said no way. Then this past April another analyst backed Munster up, and we said OK, fine, but there are so many things outside Apple's control that would have to happen first that there's just no way, not right now. The end!

Until this week, anyway. That's when everyone started hooting and hollering again because DailyTech heard from a guy who heard from a guy that Apple HDTV was a done deal, coming this fall or, you know, next year maybe, I dunno, whaddaya want, it's gonna happen just get off my back already. Blather, rinse, repeat.

The evidence is, as they say, circumstantial. Or rather, non-existant. And Apple's got a way into your television already: it's called AppleTV, and it pays for a lot of Cupertino 401ks. Besides, an HDTV is not an island the way a laptop or a smartphone is. With an HDTV, Apple would be putting its beloved user experience in the hands of cable providers, home theatre OEMs, your stupid Time Warner remote where the Menu button keeps getting jammed up. All to enter a cutthroat, commoditised market where the profit margins are slim and the product cycles last ages. One that Steve Jobs has already dismissed as being untenable.

But that's just recapping what we've already said, because nothing's really changed since then. So instead, let's play devil's advocate. Let's see how this might just make sense this time around.

An Apple HDTV would (ironically?) amount to a confession that the company has become, at its heart, a content company. Not creators, silly. Middlemen. And why not? Steve Jobs runs the biggest mixed media bazaar in the world, taking a juicy 30% slice out of every sale. And as much as a streaming media box like Apple TV answers the question of how to shill those iTunes and App Store wares on a 47-inch LED, it doesn't answer the - arguably more important - question of how to do it easily enough that my parents get it. iOS and iTunes built into a television would. Motive.

But TV margins are too low for Apple, you say. And you're right. According to Paul Gagnon of DisplaySearch, high-end TV profit margins are 10-15% at best, much lower than the insano 30-40% that Apple expects from its hardware. But remember: Apple controls its own powerful retail channel with the Apple Store; they'd be literally the only television manufacturer in the world who didn't have to give a cut to the big box retailers. (This is also how the iPad has managed to be the first Apple product in memory to be a cost leader). The influx of iTunes and television-optimised app profits would help offset thin profit margins as well. Oh, and you know what was a famously low-margin business back in 2007? mobile phones. Opportunity.

In fact, the only missing thing missing to pin an first-degree HDTV on Apple is a weapon. And that's also why I don't buy this rumour any more now than I did three months ago, a year ago. The TV-related patents Apple has - glasses-free 3D, motion controls - are either too far ahead of their time or or behind to impact the market in any significant way right now. And if anything, what many of are looking for is for our TVs to be dumber, not another venue where we're assailed with apps.

An Apple HDTV still feels too outlandish, too silly. There are too many hurdles, too little year-to-year industry innovation to make for a compelling show. Someday, sure. But in the meantime, feel free to change that dial.

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