Will Apple Produce An HDTV In 2-4 Years? No Way

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It can be argued that Apple eventually dominates in every consumer electronic market it enters. I’m sure I don’t need to point out the history of iPod, iPhone, and iPad. They are market leaders. However, the one exception is with the Apple TV. It didn’t exactly flop, but the media streamer is far from the blockbuster hit of its iDevice brothers.

That may change once the rumored $99 iTV hits, but analyst Gene Munster of Piper Jaffray indicated in a note to investors that the iTV is just the beginning. He believes the cloud media service hints of a true Apple HDTV: a flat panel HDTV that’s designed to be a stand-alone TV, allowing users to give up their game console, Blu-ray player, media streamer, and most importantly cable TV. The only thing is, Gene’s wrong — at least about the physical HDTV part. An Apple TV would go down in history as the biggest flop in the company’s history.

If there’s one thing American’s love, it’s cable TV. We love the instant access to hundreds of TV stations. That love isn’t going anywhere. There was a popular trend during the recent economy downturn to give up expensive cable TV in favor of over-the-air broadcasts and sites like Hulu and others. It’s really not a true replacement, but tends to get the job done. That movement is about to get a big boost by not on the iTV, but also the Popbox and Boxee Box.

Apple’s rumored upcoming pay-per-view cloud-based iTunes service seems like the next evolutionary step towards kicking the cable habit.  Steve Jobs himself said at the All Things D conference that the only way to change course is ” go back to square one, tear up the set top box, redesign it from scratch with a consistent UI across all these different functions, and get it to consumers in a way that they’re willing to pay for it.”

The low-cost iTV is then the perfect first step in getting consumers on board with Jobs’ vision. At only $99, it’s nearly an impulse buy for most consumers. It’s almost a no brainer if Apple’s rumored cloud-based iTunes service streams content to all their iDevices. Pay for it once and you could watch it on your iTV, iPad, or iPhone. That’s awesome.

However, the iTV isn’t going back to square one. It will just be another box to sit along side the cable box, game system, and everything else on the TV stand. It’s the service that’s special. It’s easy to see where Gene got the idea that in 2-4 years, Apple will be selling a self-branded Apple HDTV. It’s almost logical if you don your Apple fanboy blinders. After all, that’s about the same model Apple uses in the computer industry: the iTV would be like the headless Mac mini for those that want to test the water and then Apple HDTV is like the iMac. There’s just one problem, only Apple diehard fanboys would buy an Apple HDTV and there’s no money in HDTVs right now.

It can be argued that Apple alread has released a TV. It’s called the iPad and if you’ve ever watched HD video in your bed you understand that, in short, the iPad is a 10-inch portable TV. But it’s also an iOS device with all of the trimmings.

The Apple iDevices dominate in their respective markets because they’re a fairly good value and then Apple computers get away with charging a premium because, well, they’re very good. There’s no room in the competitive HDTV market for Apple to make money — and that’s their number one goal, btw. Most the consumer-level sets are priced so aggressively that retailers have to turn to hawking overpriced cables and expensive service plans just to make a profit. Then, the premium, high-end panels are generally only from brands that actually manufacture the panels themselves like Panasonic, Sharp, Sony and Samsung. Apple doesn’t make any of their own screens. It would be nearly impossible for an Apple HDTV to break into the market even with some fancy iOS operating system that widely proclaims that it doesn’t need any set-top boxes to work.

No, what’s more likely is that Apple will follow the CE trend of set-top boxes. This way Apple will be able to quickly turn the product profitable with increasing manufacturing margins as more units are sold. Taking a slight loss on the iTV to get it out the door under the $100 mark and help launch the streaming iTunes service is nothing compared to having a high-profile product like the Apple HDTV flop. An Apple HDTV would have to be a breakaway hit like the iDevices before it inorder for Apple to actually make anything from it. The Bring Your Own Screen product model is truly the best and only way for the Apple to employ, primarily as it doesn’t rock the comfy boat consumers already enjoy.

Right now the norm for most consumers is to watch live content the moment they turn on their TV. At 6:00, they watch the news, followed by Judge Judy, and then some random laugh-tracked sitcom. That’s the way it’s been for generations and that’s the way it will stay. I’m pretty sure that even Mr. Apple fanboy MG himself would grow tired of the micro-payment services and lack of live content. Even the Super Bowl Monday Night Football is now exclusive to cable.

Now, I’m all for different options and the iTV seems like it will satisfy plenty of people thanks to the low initial cost and cloud-based streaming service. A few years ago before HDTVs where the norm, and Apple was a slightly more wild company, an Apple HDTV might have been in the cards. Sure, lots can happen within Gene’s 2-4 year suggested time frame. Apple’s streaming service could become very popular and hit profitability before estamited. But while that’s happening, more and more households will  have also spent hundreds of dollars on a non-Apple HDTV, therefore decreasing their chances of buying another another one until their new set dies. It just seems Apple is late too late to this party and never wanted to attend in the first place.

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