With only a few exceptions (remember the Lisa?), Apple Inc. (Nasdaq: AAPL)'s product development strategy has been "If we build it, they will come." The most recent example is the new iPad, which had iFans once again camping out in front of Apple retail stores. The scene has become so familiar that Samsung Corp. spoofs it in a commercial for its Galaxy Note, and the media covers the queuing up as a news event.
Now, Apple's largest manufacturing partner, Foxconn Electronics Inc. , has let it slip that Apple will soon be building an Apple TV. It's no surprise that this is happening: Foxconn's recent investment in Sharp Electronics Corp. 's display business had "Apple TV" written all over it. What is surprising is a seasoned executive such as Foxconn chief Terry Gou letting a customer's product strategy slip, but that's a discussion for another day.
Apple's offering in the TV business to date has been a sort of set-top box that allows users to access the Internet. Apple has all the necessary resources to get into the TV business, including a patented display technology. Why Apple hasn't made that move yet is supposedly due to former CEO Steve Jobs's desire to develop a user-friendly TV set that syncs with other household devices. Shortly before his death last year, Jobs told biographer Walter Issacson that he had "cracked the code" to integrated TV.
Experience has taught prognosticators that external market conditions have very little to do with Apple's product-development strategy. The TV market has been in the doldrums for awhile, due in large part to market saturation. LCD screen prices have steadily dropped; large-screen manufacturing barriers have been breached; and HDTV prices have hit the "very affordable" range. Efforts to reboot the TV market with offerings such as 3D haven't gained traction. HDTV technology and product offerings have reached the point where incremental improvements are not enough: Users are pretty happy with what they have.
So what is it going to take to get consumers to buy yet another TV? Reports from CNET and other outlets have suggested that Apple will integrate the SIRI voice recognition system on its TVs. The cloud has also enabled a level of functionality not available before, so downloading content across multiple devices is easier and less expensive. Other suggestions include a built-in camera and access to the App store.
The downside is that the iTV will no doubt carry a premium pricetag. iPads and iPhones are among the most-expensive items in the consumer electronics industry, and Apple's discounts on last-generation products aren't what you'd call "steep." Rumors that the global economy is turning around seem exaggerated, at least for Europe and some regions in Asia/Pacific. If Apple releases the iTV this year, as some suggest, the "Apple Effect" could go the way of the Titanic. If Apple waits until 2014, another rumored target date, the iTV could re-set the standard for television.
What do you think? For my part, if SIRI can replace remote controls, I'm willing to test drive the iTV.
Barbara, let's imagine a TV that begins with a solid Sharp Electronics foundation, adds the uber network connectability of Cisco then sexes it-up in genuine Apple style -- all at a mass market price-point only possible through a Tier-1 CEM like Foxconn? The only thing missing here is Cisco. Hey, wait-a-minute: Didn't Foxconn recently buy Cisco's TV cable and set-top works in Juarez, Mexico....?
I have no evidence in support of this but I doubt the Foxconn chairman just decided to talk without Apple's consent about the Apple TV. It isn't a secret that Apple has tried to gain a following in that market before and I believe it already has a product there. However, Foxconn talking about a customer's unannounced product is in itself highly unusual. So, he is either getting an earful from Apple or a pat on the back for teasing out the "news."
@prabhakar: Re the Internet, it seems to me Apple might be circumventing the service providers which may cause problems. Look at it this way: Right now, Xfinity provides Web-streamed programs as along as I am a subscriber. If that programming was suddenly available on Hulu for nothing, why subscribe to Xfinity? I think that is one of the dilemmas all Internet TV manufacturers will face.
@tirla: I'm not sure how much of a gamble it is for Apple since its is Foxconn that put the money down on the Sharp business. In terms of launching a product that tanks, Apple has survived that once already--the Lisa pen-based tablet that nobody seems to remember. Apple has already established it can go one better than everyone else--there was mp3, then there was the iPod. No matter how entrenced someone is in the market, Apple will try to dislodge them. But it will have to be a really unique offering to displace the established TV vendors.
I think that Samsung (again) has something very similar to what iTV is trying to integrate. I saw recent advertisement of "Samsung Smart TVs" which seems to have a next generation TV. I do not have full specs but there is voice recognition, camera and internet connectivity available. From that point of view, Apple might integrate some more features but from functionality wise both will be comparable. Advantage that Apple has is ofcourse its customer base.
While poor people are languishing for their daily bread and water , there is no dearth on this people of people having so much cash with them that they are just waiting to grab something new , something jazzy , something state of art , what ever may be its price tag. More the premium more the pull for such products from these wealthy customers.
So I am not worried whether the ITV will be a successful product . People are anyway bored with those remote controlled Tvs which only allow you to surf the channels. People are now looking at a TV which will be an interactive gadgets. May be with such TV you will be able to participate in the TV reality shows while sitting in your drawing room or in your kitchen.
@Barbara, do you think this big gamble by Apple, since there are already too many established players in the TV market. Moreover OLED TVs are on the horizon as well and they will be main stream in couple of years.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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