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iTV: Field of Dreams or Titanic?

With only a few exceptions (remember the Lisa?), {complink 379|Apple Inc.}'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 {complink 4750|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, {complink 2125|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 {complink 4907|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.

18 comments on “iTV: Field of Dreams or Titanic?

  1. SunitaT
    May 15, 2012

    @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.

  2. prabhakar_deosthali
    May 15, 2012

    @Barbara

    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.

     

  3. Himanshugupta
    May 15, 2012

    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.

  4. Barbara Jorgensen
    May 15, 2012

    @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.

  5. Barbara Jorgensen
    May 15, 2012

    @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.

  6. Barbara Jorgensen
    May 15, 2012

    @Himan: I vaguely remember the TV commercial as well. I'll pay more attention next time…

  7. bolaji ojo
    May 15, 2012

    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.”

  8. RadiowaveX
    May 15, 2012

    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….?

  9. Barbara Jorgensen
    May 15, 2012

    Rwave: And they say vertical integration is dead. Pox upon them (whoever “they” are)!

    I missed the item on Foxconn/Cisco; still catching up from traveling last week. I can't help but compare Foxconn to Star Trek's Borg: “We will assimilate you…”

    Thanks for the link!

  10. Barbara Jorgensen
    May 15, 2012

    @Bolaji: yeah, we all know that some leaks aren't really leaks. The timing was curious, though: it happened around the same time Joe Biden “leaked” that Obama is pro-gay-marriage. So we have info about two powerful entities (Apple and Obama)  that the entities aren't directly responsible for. I am wondering if plausible deniability isn't in play here…

  11. Mr. Roques
    May 15, 2012

    I've been hoping for Apple to jump into other devices (not because I'll buy one but I will wait for the competition's cheaper device). 

    The “iTV” definitely will make things interesting as it will compete with Samsung's Smart TV (or Google's TV). I think its a great way to, without much innovation, create a whole new product. 

    Maybe they should come in partnership with cable providers, similar to iPhones and mobile carriers, who subsidize the equipment in exchange of a 18month contract.

  12. SunitaT
    May 16, 2012

    I saw recent advertisement of “Samsung Smart TVs” which seems to have a next generation TV.

    @Himanshugupta, I have seen the ad too. I liked all the features especially the gesture recognition and face detection features. I am not sure about the price though. Only thing that I feel missing is feautres like “SIRI” which Apple is promising in its iTV.

  13. mfbertozzi
    May 16, 2012

    Taking a look at below posts a cross-connect grid raised in my mind; as of today, we are living managing tough agenda, day-by-day; TV, in general, requires to pay attention a free time, it is completly different respect to socials or other interaction. As consequence, will it still have market? It doesn't matter the device.

  14. Ariella
    May 16, 2012

    @Mr. Roques “  (not because I'll buy one but I will wait for the competition's cheaper device). ” Yup, brand loyalty is overrated.

  15. Wale Bakare
    May 18, 2012

    I love getting involved in this field – technology! Am wondering how this would turn out to be in the world market, Samsung Smart TV and iTV. And we should not expect only those 2 giants in this.  Meanwhile, there are too much money to be made in this world. My worry now is about the companies still trading in obsolete technologies – analogue stuffs, some ultra high power consuming devices and etc.

  16. Mr. Roques
    June 22, 2012

    HA! I'm sure apple fans will continue to buy them, I'm just here for the fun. I would also like to see them get into the camera market… !

  17. Ariella
    June 22, 2012

    @Mr Roques Yes, they have plenty of those.  I'm not an Apple fan — not because I dislike their products but because I just don't end up using them. We're strictly PC here for practical reasons, and I keep my cell phone simple.  But really I don't have a great deal of brand loyalty in general.

  18. Mr. Roques
    July 11, 2012

    Well, that excuse is getting older and older, there are ways to don't need to worry about those things anymore (PCs vs Macs). 

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