Pando

Apple won't release a television set, and that's okay

By Nathaniel Mott , written on May 19, 2015

From The News Desk

Apple isn't going to release a television set any time soon.

The Wall Street Journal reports that Apple worked on a television set for almost a decade before it decided "more than a year ago" that its proposed features weren't "compelling enough to enter the highly competitive television market."

Carl Icahn still believes Apple will release a television set -- and a car -- in the coming years. But even Gene Munster, the Piper Jaffray analyst who has said an Apple television set was imminent for years, seems to have thrown in the towel.

That's probably for the best. While Apple could still release a television set in the future, for now it seems to have renewed its focus on its set-top box, which will reportedly receive a pretty substantial upgrade at Apple's WWDC in June.

It makes more sense for Apple to create something that plugs into consumers' existing television sets than it does for the company to release a television set that will have to compete with "good enough" and premium products alike.

Apple doesn't enter commoditized markets. It allows other companies to fumble with new product categories -- smartphones, tablets, smartwatches -- and then releases a product of its own when it believes the timing is right.

Are those categories eventually commoditized? Yep. There are good phones that cost less than $300 without a contract. Tablets are getting cheaper and cheaper. Smartwatches will eventually fall in price, too, assuming anybody buys them.

But, at least when Apple enters these markets, they aren't yet dominated by mostly-interchangeable products that compete more on price than features. Yet in many ways that's exactly where the television set market finds itself today.

Set-top boxes are different. You probably don't want to buy a knock-off product, if only because generic device-makers often ship products with nigh-unusable software. Higher-end devices also have access to exclusive streaming services.

Apple can't make the world's best television set and expect a good return on its investment. Consumers are too used to buying relatively cheap products that are good enough to sit in their living rooms and watch "Friends" re-runs on. Instead Apple can make and profit off the best set-top box to plug into those cheap TVs.

There might not ever be an Apple TV like the one Icahn and Munster expect. But I suspect most consumers, and Apple, will be okay with the next best thing.

[illustration by Brad Jonas]