Apple Inc. is ready and willing to enter the low margin business of selling TVs, according to an unnamed “former Apple executive” cited by The Daily Tech. If the source is correct, Apple is going to make some TVs, add in the guts for what the company currently calls the Apple TV settop box, load them up with iTunes, and, “blow Netflix and all those other guys away.”
All of this is happening in time for a Fall release date, too.
Better yet, the company is going to depart from its usual tradition of controlling every aspect of the design and manufacturing of its products, and plop the Apple logo on top of a TV set provided by a “major supplier (our guess would be Samsung Electronics).”
The unnamed source added, “You’ll go into an Apple retail store and be able to walk out with a TV. It’s perfect.”
Speaking of perfect, in what may be the most fantastic typo ever, the reporter, Jason Mick, wrote, “We expressed credulity that an OEM would allow Apple to cut into their bottom line, but our source aptly pointed out the OEM would be winning even if Apple cuts into their branded sales.”
We suspect Mr. Mick intended to say “incredulity,” because it would indeed take a fair measure, if not an over-abundance, of credulity to swallow this story. For those inclined towards the curious, “credulity” is defined (by Apple’s Mac OS X dictionary) as, “a tendency to be too ready to believe that something is real or true.” Incredulity is, of course, the opposite, or, “the state of being unwilling or unable to believe something.”
These aren’t the first rumors that Apple was considering making its own TV, but it is the first to be attributed to a supposedly former Apple executive and the first to suggest that Apple would trust the design and manufacturing of an Apple product to another company. The reporter also loses credibility by saying that the current Apple TV settop box “hardly sent sales soaring,” when the reality is that it did precisely that, send sales soaring in comparison to prior versions of the device.
It’s certainly possible that Apple could enter the TV business, but it’s unclear why the company would want to do so. The Apple TV settop box offers Apple reach into any, if not every, living room, and as noted in the intro, the TV business is currently a high-volume, very low margin business. Apple simply doesn’t compete in high-volume, low-margin businesses.
For Apple to disrupt this industry like it did with MP3 players (iPod), smartphones (iPhone), and tablets (iPad), the company would have to offer the public a TV set so compelling they would be willing to pay the kind of prices that Apple has been able to charge for its other products.
To put that more succinctly, Apple’s success has been based on making products so innovative that customers were willing to pay more for them than the cheap crap every other company peddles. Where is the room for innovation in the TV set business?
One such innovation, of course, could be for Apple to deliver apps to the TV (as noted by MG Siegler at TechCrunch). Games, in particular games controlled by iPhone and iPad, could turn Apple into an instant-console competitor.
The reality, however, is that Apple can (and should) do that through its existing Apple TV, and the bigger reality is that Apple would likely want to perfect this concept through the Apple TV before trying to sell a TV made (or at least sold) by Apple.
Mr. Siegler made one more point worth repeating, and that is while the source is supposedly a “former Apple executive,” there are very few “former Apple executives” in the wild, and the ones with direct knowledge of any particular unreleased and unannounced product are fewer still.
Such a leak would be easy to pin down and identify, and Apple takes its Non Disclosure Agreements very seriously.
We have no doubt that if Apple were to enter the TV set business the company would do so with a very compelling product, but this particular rumor is not likely to pan out.