TV industry in ‘crisis mode’ should help iTV own premium segment

By , Apr 23, 2012

As the likes of Samsung, Panasonic and others cut costs in order to keep their struggling television-making operations in the black, Apple of California is believed to be interested in the high-end of the market, according to one industry executive.

By largely ignoring this lucrative segment of the TV set industry, existing players have already helped Apple make billions when it fills the void with a superbly designed product that doesn’t compromise on quality.

According to this industry source, the iPhone maker apparently is convinced it could rule the premium segment by selling a $2000-$3000 television set with advanced features, for an estimated $10 billion a year opportunity…

Accedo CEO Michael Lantz told Boy Genius Report via email that Apple could easily own up to ten percent of the entire television market, worth an estimated $100 billion.

Accedo is a smart TV developer behind the HBO Go and NBA Gametime apps, among other programs.

The TV set industry is in crisis mode. The manufacturers are scrambling to cut costs but still add features to roll out ever higher volumes of TV sets through struggling retailers. Even though design is an important feature for high end TV sets, this is a much smaller share of the market than it should be. It is my firm belief that there is a wide open market slot for a high-end design-led Apple TV set in this market. Apple should be able to market and successfully [sic] sell $2000-3000 TV sets with unprecedented margins.

I couldn’t agree more, except for one thing: the $2000-$3000 price tag. Right now, premium means 50-inch TVs rocking the latest in connectivity, apps and what not.

Yes, Apple owns the premium segment in almost every market it competes in and yes, fans of the company’s gadgets are more than willing to pay a premium for solutions that just work.

Nonetheless, it’s simply too high a price point, in my opinion.

I could be wrong as well because aTV set isn’t something people upgrade every once in a while, like tablets or smartphones. Perhaps folks in the market for a really cutting-edge product would consider a $3,000 TV set from Apple?

Lantz argued:

Of course, these TV sets will have the Apple TV built in and seamlessly integrate with other Apple products, but fundamentally I think Apple will sell on superior design and quality of the actual TV set.

Apple has another major advantage over other incumbents, the executive noted:

By using their Apple stores as the main outlets for these TV sets, they have a natural sales channel and can use the current market momentum to sell the TVs. The recent appointment of Dixon’s John Browett as head of Apple’s retail operations ensures that the more complex distribution chains for TV sets can be dealt with cost-efficiently.

He’s right on Apple stores being the perfect outlets to explain the benefits of such a pricey product to consumers. Retail staff at electronics chains fail miserably in educating ordinary buyers on advanced features. As a result, many people end up buying a TV set purely based on size, brand or marketing talk.

Little do average folks know about Internet connectivity, 3D or apps, for example. That’s why you don’t see those capabilities standard in the TV set industry yet.

Apple stores with their unique shopping experience, knowledgeable retail staff and awesome product displays should be the perfect place to discover and learn about that 50-inch television set Apple’s design guru Jonathan Ive is apparently testing in Cupertino.

Also important, not everyone is sold on the iTV idea, even if Piper Jaffray’s resident Apple analyst Gene Munster called it “the biggest thing in consumer electronics since the smartphone”.

If such a product does exist in Apple’s labs and the company intends on releasing it sooner than later, as rumored, it better deliver lots of bells’n’whistles – and then some.

Otherwise, and I’m sorry to say this, I simply cannot see myself shelling out two or three grands for a television set, even if it comes with cutting-edge design and the shiny Apple logo.

Would you upgrade your TV set if Apple came out with an integrated television product of its own?

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  • Anonymous

    2-3 thousand dollars is just out of control. That’s twice as much as you’d have to pay for today’s high quality set.

  • http://www.facebook.com/people/Thomas-N-Shanna-Bernauer/100002948594321 Thomas N Shanna Bernauer

    Yeah I’m cool with my 450$ 50 inch flatscreen (1080p 120hz) it’s just that price is to high in the market we live in. Low cost is key in the TV market. I don’t think the masses has 2k just to spend on a tv that displays a similar picture than a low end television.

  • http://www.GoldenGateDomains.com/ Golden Gate Domains

    Where I see this working is from two key elements:

    FIRST — Based on an article recently posted by iDB – Apple considering creating a Bank…. Humm why a bank do you suppose?

    Well, to sell these TV sets at $2-$3K most people will want financing. Think about the iPhone, most people buy them on a Contract with the Carrier!

    So, they don’t actually shell out $6-$9 hundred for an iPhone or iPad. So, financing is the key, and if Apple has their own bank + $60+ Billion in Cash, they can finance these TV sets – and even make more $$$ on the Interest.

    SECOND — The Apple TV is a total solution, it is a computer, it is your game center, it is a home video phone and it is your TV – all elements combined.

    IN CONCLUSION — By combining all these elements in to one unit, it makes the sales proposition very easy for the employee at the Apple Store!

    By telling the consumer for only 10% down and a low monthly payment of around $50/month, Apple will create one of the most irresistible sales propositions, who could resist???

  • Anonymous

    I don’t even read these posts anymore, i’m just fed up of people calling it “iTV” … That will never be the name, it’s one thing to post constant rumours but this aspect isn’t even that, it’s just 100% incorrect.

  • Anonymous

    I prefer projectors so it is very unlikely Apple would ever build a TV I would want to buy.

    However I’m not sure Apple is actually building a TV, it could easily be the next generation iMac in some way that is making people think Apple in building a TV. I mean, what is really the difference between a larger display with a Mac mini built in and the rumored iTV?

  • Anonymous

    My opinion is that if apple were to somehow create a way to watch tv programming ala cart, they would have a real selling point but there is not much they can do to innovate the tv industry, especially since we all press the on button on the remote, flip to a channel and sit there.

  • http://twitter.com/ahood81 Adam Hood

    I don’t see the problem with the price tag, When 1080p TV’s first came out they were 2-3 Grand. Same with 3D TV’s, problem is the prices normally come down but Apple products do not come down.