Last week an advance quote from the Steve Jobs biography seemed to suggest that an Apple (s aapl) television set could be on the way, and an investor note Monday from Piper Jaffray’s Gene Munster seems designed to capitalize on that statement. Citing supplier sources, Munster says Apple is actively building prototypes of its HD TV set.
This isn’t a new tune for Munster. The analyst has periodically raised the possibility of an actual Apple TV (not to be confused with the small, set-top device Apple currently sells) since 2009. He’s not alone in thinking Apple could go that way, but he has been the most vocal herald of a move many others have seen as unlikely.
Munster has high expectations for an Apple television’s effect on Apple’s bottom line, too. He thinks that adding one to its lineup of devices in late 2012 will grow the company’s revenue by 3 percent in 2013, thanks to the rising consumer interest in Internet-connected home entertainment solutions. An Apple television would benefit from access to strong existing content ecosystems, including the iTunes and App Stores, as well as more recent cloud-connected end-user services like iCloud and the voice-powered Siri virtual assistant.
It would be great to be able to directly access your past iTunes media purchases directly through your television, without the need for any other connected devices, and to bark commands at the TV instead of using a remote, or ask it to look up an actor in the program you’re currently watching on IMDB, (s amzn) for example. But that kind of integration won’t come cheap, with Munster estimating that a 40-inch Apple television could cost as much as $800 more than its basic LCD TV equivalent.
Still, that upfront cost difference is offset when you consider that add-ons like DVRs and media devices won’t be required, since the Apple TV set will effectively be an all-in-one content delivery solution (provided you’re okay with staying inside Apple’s ecosystem).
That easy access to games, movies, TV and likely live sports, too, as we’ve seen added via apps and subscription services to the existing Apple TV, along with claims in his biography that Apple has “cracked” the key to making an Apple television appealing and easy-to-use, could help it gain traction as it enters the crowded TV market.
On the other hand, smart TVs are quickly becoming commonplace, as manufacturers add their own apps and media sources (such as integrated Netflix(s nflx)) to keep connected consumers happy. Apple has its media and software ecosystem advantage, with market-leading digital music, video and app sales, but whether customers are willing to pay more upfront for the privilege of accessing that ecosystem is another question entirely. Also, TVs, are low-frequency purchases and have low margins, too, so some think they don’t make sense from the standpoint of Apple’s model of frequent hardware updates and high margin sales.
Would you pay extra for an Apple television with all the features of the current Apple TV bundled inside? Would the addition of Siri, iCloud or an actual App Store affect your decision?