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

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?