Apple May Be Readying Full-On TV Product

Some analysts who follow Apple believe the company is hoarding larger display technology to build a more robust web television product.

Apple COO Tim Cook said during the company’s first-quarter earnings call that it had paid $3.9bn (£2.4bn) in inventory component prepayments and capital expenditures to three companies.

Sales potential

Based on an analysis of Apple’s existing supplier relations, intellectual property ownership, and licensing and technology, those companies may be LG Display, Sharp and Toshiba Mobile Display, IHS analyst Vinita Jakhanwal said on 1 February.

Piper Jaffray analyst Gene Munster said the investment in components revolves around LCD displays used for Apple’s iPad and iPhone lines, Macs with 27-inch screens, and possibly up to 50-inch-screen Apple televisions in the future.

An Apple television, not to be confused with the current Apple TV service that streams Netflix content and YouTube videos, would be a comprehensive, web-based TV.

The device would include a Safari web browser and sync content and services across users’ iPhones, iPads and Macs, as well as grant users access to Apple’s App Store.

“While Apple’s commitment to the living room remains a ‘hobby’, we continue to believe the company will enter the TV market with a full focus, as an all-in-one Apple television could move the needle when connected TVs proliferate,” Munster wrote in a research note on 3 February.

He added that of the 220 million flat-panel TVs sold in 2012, nearly half will be web-connected, of which Apple could sell 1.4 million units. An Apple television could add $2.5bn, or 2 percent, to revenue in 2012, and grow to $4bn in 2013 and $6bn in 2014.

Simply, Apple would add yet another significant revenue stream to its fleet of successful consumer products. These include the iPhone, which shipped 16.2 million units in the holiday quarter; the iPad, which shipped about 15 million units in 2010; the always popular iPod music players; and Mac computers and laptops.

Google competition

A whole Apple television offering would put Apple in closer competition with Google TV, an Android-based service with a Chrome web browser powered by an Intel Atom processor and running on a Logitech Revue companion box, as well as on Blu-ray players and TVs from Sony.

Users can search for web and TV programs using special Google TV Search and access their digital video recordings from a keyboard controller, a special remote, or even mobile phone applications from Logitech, Google and Samsung.

Google TV received a poor reception for being expensive, buggy and hard to use by media. Moreover, some broadcast companies have been loath to embrace the service, which has seen improvements to the Netflix application and other programs.

Apple TV has been kicking around for a few years, but Apple streamlined the hardware and software in September.

Where Apple once offered a $229 box for users to buy, the company is now offering a $99 device that offers high-definition Netflix movie rentals for $4.99 and a TV rental option for 99 cents a show, along with YouTube, Flickr and MobileMe integration.