Exactly How The Apple TV Will Transform The Industry

Marcus is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

In 2001, Apple (NASDAQ: AAPL) launched the iPod device, a digital music player that the majority perceived as the modern standard for the digital music sector. At one stage, Apple enjoyed almost 70% market share inside the digital music space. To use a well known saying, the iPod was a game changer.

In 2007, Apple released the iPhone, marking its access inside of the mobile phone industry. By 2012, the apple iPhone held 53.3% market share. Out of every two mobile phone customers, one was making phone calls by using an iPhone. Within the extremely competitive mobile phone universe, the iPhone was and still is a game changer.

In 2010, Apple released the iPad tablet, a product that a large number of people claimed introduced the tablet device to the general audience. Numerous companies have copied the iPad, but Apple continues to be the leader in the space. The most recent statistics indicate that Apple maintains a 69.6% share in the worldwide tablet market. As previously stated, another game changer.

What is next for Apple? Customers, investors and also techies are all expecting the subsequent game-changing gadget. A few protest that because the iPod ended up being basically replaced by the iPhone, and also the iPhone and iPad have merely obtained incremental improvements, it is time for Apple to strike this marketplace away by having something totally new. That something might be the upcoming iTV.

Is this iTV claim real?

Possibly. The expression "iTV" is centered on a rumor, and also the existence associated with a TV in the works is not really verified. Truly the only "sort-of" affirmation originates from Apple CEO Tim Cook. In a fresh interview, he stated, "When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years. It's an area of intense interest. I can't say more than that."

In case it is real, on the other hand, Apple could possibly have identified a market ripe for yet another Apple game-changing product. Remember the dark times of the music industry? As soon as music started to be digital, it was very easily transferred around to any individual who desired it. Money does not grow on trees, however as a result of websites which include Napster, music did. If you ever visited Napster's website, you could obtain almost any music you desired totally free. So why buy it anymore?

The trouble of piracy was tormenting the record labels. Sales and profits were all the way down, and also the problem was set to become worse. The sector was in turbulence, and no one understood exactly what to do about it. Through iTunes, Apple split up the standard album into distinct songs. No more did consumers need to buy an entire album. It was possible to buy a single music track and download it using their iPod. Apple, as outlined by some, ended up saving the music business.

Nowadays, television has comparable developing problems. "I am frustrated and I can not take it any longer" is the struggle of customers who not only dislike advertisements, but far more, dislike purchasing countless channels although just watching a dozen or so.

Forbes has reported that 82% of customers from the ages of 18 to 24 choose to watch channels on the internet rather than through TV. Apple's iTV could possibly incorporate the social element of YouTube along with other web content providers with the new, top quality content of broadcast television. Apple, subsequently, would probably change the TV business in the same manner it did the music industry.

Imagine if all those high-dollar cable television "packages" started to be a remote memory and consumers solely purchased the channels they desired? To borrow one more traditionally used saying, the opportunities are countless and Apple is aware of it.

There are roadblocks

It truly is an utopian-sounding scenario. Everything all of us detest in relation to television are resolved thanks to Apple. It might materialize, although the TV business continues to be hesitant to change. Content vendors are definitely not interested in modifying how they conduct business. Looking at just how Apple transformed the music industry, all those earning money off television don't want Apple swooping in and eating their profits. To express that it is a formality that Apple's up coming major innovation may be the iTV is faraway from certain. Similar to goings-on in Washington, as soon as money and power turn out to be part of the formula, a terrific concept is frequently removed down to fine or merely OK.

The bottom line

Would you purchase an iTV? A newly released study discovered that customers could well be ready to pay about 20% more for a television that features the Apple company logo on it. The same study also discovered that:

  • 11% of participants reported they would be "very interested" in purchasing an Apple-branded Television set, which in turn results in 13 million packages in the U.S. only.
  • 36% stated they would be "relatively interested," which might result in an additional 43 million units.
  • 46% of participants were ready to pay more than $1,000 to have an iTV and also 10% were prepared to pay above $2,000.

Conclusion: iTV offers a $13 billion opportunity that might increase $4.50 to Apple's EPS.

That is definitely great news for Apple. No matter whether iTV will be a full-fledged TV, an alternative for your present set-top box, or simply nothing at all, remains to be seen. The general public is expecting Apple to become an industry disrupter once more. A very important factor is certain: Apple possesses a wad of money bigger than a few small countries. If anyone can get it done, it definitely is Apple!


Vinny3001 has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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