Let’s all stop talking about the Apple TV set

Every week brings more speculation about the long-awaited product. But will it actually be worth the wait?

Topics: The Guardian, Apple, TV, Movies, ipods, Computers, Netflix, , ,

Let's all stop talking about the Apple TV setThe Apple store in Munich (Credit: AP/Lukas Barth)

Rumours that Apple will unveil a TV set won’t go away. Each week another tidbit of information says Apple has been negotiating with this or that American TV content provider – now ESPN, then HOB, then Viacom – to offer exclusive programmes for its always-expected-yet-never-shown TV set.

One analyst, Gene Munster, has been forecasting since February 2009 that Apple is about to offer a TV.

Apple does offer something called Apple TV: it’s a set-top box the size and colour of an ice hockey puck. Steve Jobs referred to it as a “hobby”, and Tim Cook hasn’t changed that approach. Even so, more than 13m have sold since the launch, half of those in the past year.

Why is the Apple TV box a “hobby”? Because Apple hasn’t figured out how to push the US’s entrenched TV operators and cable networks aside. It sells films and TV shows via its Apple Store on the box, but not much else. In the UK, it’s only really useful for watching Netflix or YouTube; there isn’t an iPlayer app, let alone Channel 4′s 4OD or ITV Player. Leaked talks about content are most likely for this product. Americans yearn for Apple to disrupt TV, because they hate their cable and TV companies. It won’t.

After all, why would Apple try to crack the TV market? The replacement rate is about 10% annually at best; there is fierce price competition; it’s a mature market with little room for growth.

Apple likes new markets with huge room for growth, high replacement rates, and low price sensitivity. Hence digital music players in 2001 – where the iPod boomed for eight years. To smartphones in 2007 it brought the iPhone – which people replace every two years (ie 50% annually) in a still-growing market. For tablets in 2010, the iPad blazed a trail and created a new market which is growing at 50% annually.

Set against that, selling big panes of glass looks pointless. Apple will keep doing phones, and tablets, and perhaps soon something wearable. Why? Nike just announced there are 18 million users of its Fuelband fitness gadgets worldwide. Cook is known to be keen on fitness. Apple recently hired an ex-Nike staffer, Jay Blahnik, who worked on its Fuelband. Expect a wearable Apple device long before a TV.

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