Delving into the Reasons Why Apple May Not Make a TV
We've Been Here Before
Last week, Bloomberg's Mark Gurman sparked speculation by stating that the Mac-maker is "evaluating" an Apple-branded television set. This isn't the first time such rumors have surfaced. Just a few days ago, a follow-up from Gurman revealed that the company explored the idea of making a television shortly after the launch of the iPad in 2010. However, it wasn't a traditional television. The concept was to create something with a large display that could be placed in a stand for TV viewing and also serve as a touch-screen Mac or a giant iPad when needed. But instead, the company stuck with Apple TV, a set-top box similar in nature but without a screen. The later introduction of the Apple TV app offered an even more stripped-down option. Now, it seems that Apple is once again looking into making a television, potentially as part of a new move into smart home devices.These past experiences and current considerations highlight the complexity of Apple's potential foray into the television market. It's clear that the company has been weighing the pros and cons for quite some time.
Slim Profits Explain Why an Apple Television is Very Unlikely
Ross Young, CEO of Display Supply Chain Consultants, casts doubt on the possibility of an Apple-branded TV. He stated, "I am not aware of any plans for Apple to sell TVs." Young has a reputation for accuracy in predicting future products from Apple, thanks to his extensive network of sources within companies that make screen panels.Gurman himself also tempered any excitement about an Apple television. He pointed out that TVs are a low-margin industry, and consumers don't purchase new ones frequently. Young added more details, showing that profit margins on TVs from Samsung, LG, Sony, and TCL range from around 5% to 10%, and sometimes even lower. "Margins are low and seasonal," Young said. "Certainly well below where Apple would like to be."
Gurman further emphasized in his latest report that some Apple products achieve profit margins in the 40% to 60% range. Clearly, the company has no interest in entering a market segment with such low profit margins. Especially when people replace their TVs infrequently. For example, I have a great TV from 2017 that still functions perfectly. There's no compelling reason for me to replace it, and I'm someone who gets a new iPhone every year and a new iPad every two years.
Moreover, TVs are commodities. Whether you choose a Samsung, Sony, LG, or other brand, they all look quite similar. It's not a market where Apple can introduce a significantly better product to justify a higher profit margin.
Consider Studio Display and Apple TV Set-Top Box
If you really want an "Apple television" today, you can own a Studio Display. However, the price starts at ,599. For comparison, the Asus ProArt 5K with similar specs costs only 9.For streaming video, you can connect the Apple TV 4K set-top box to the Studio Display. The set-top box starts at 9. Alternatively, you could buy a Roku Express 4K+ for . So, the Apple-branded television solution costs ,728, while the Asus/Roku option is only 9. In other words, the third-party alternative is less than half the cost.
True, both setups don't offer exactly the same experience. The Apple monitor comes with a higher-quality stand, and the Apple set-top box provides faster performance and some extra features. But the difference in cost is significant and makes it hard to justify the higher price.
It's clear that Apple has marketing experts who would surely advise CEO Tim Cook that an Apple television would likely be an unprofitable venture. The company's focus on high-profit margins and its reputation for quality products make the prospect of an Apple-branded TV seem less likely.
