Citing supply chain sources, DisplaySearch yesterday shattered analyst Gene Munster’s ‘Apple-televison-set-due-this-Christmas’ pipe dream to pieces by claiming Apple has put the iTV project on the back burner as it focuses on wearable projects, a new priority for Tim Cook & Co. And guess what reliable analyst restrains himself from making wild Munster-like iTV predictions?
That’s right, Ming-Chi Kuo of KGI Securities.
Thus, it goes without saying that Kuo’s note to clients in which he analyzes Apple’s television plans hasn’t gone unnoticed with us. In short, he’s suggesting that with the technological pieces all in place now Apple is about to introduce significant improvements to the existing $99 Apple TV set-top box.
Bonus: I also get to deconstruct some of the outrageously inaccurate predictions by crazypants Apple analysts Gene Munster!
Kuo’s note to clients, obtained by 9to5Mac, calls for an Apple TV refresh next year.
The major hardware feature of the fourth-generation Apple TV is apparently the company’s latest 64-bit desktop-class processor which now powers the iPhone 5s, iPad Air and the iPad mini with Retina display.
We expect Apple to launch a new version of the Apple TV with an A7 processor in 2014, and we forecast 2014 shipments to total 8.2 million units. Shipment growth will be limited unless Apple is able to integrate more TV content, services and its App Store, in our view.
This is a no-brainer.
The current Apple TV’s single-core A5 chip is slower versus the original iPad mini’s dual-core variant. The architectural gap manifests itself as an annoyance. For instance, you can see the A5 sometimes struggling to decode 1080p iTunes movies, dropping frames and stuttering. The jerkiness of full HD screen savers is another example.
If Apple is to put full HD 1,920-by-1,080 pixel apps and games on your big screen TV, a next-generation Apple TV better run the A7 chip. And because power is not of concern to these boxes, Apple can tweak the frequency to make the A7 run faster or even add juicer graphics for silky smooth, console-grade 3D gaming.
As for the iTV, Kuo mentions ongoing challenges on the content and services side:
We believe the slowdown in Apple TV shipments suggests Apple faces challenges in integrating TV content and services. If Apple wants to launch iTV, the challenges of integrating content and service are more difficult considering the different TV content ecosystems (e.g. cable operators) in various countries.
Moreover, establishing an iTV supply chain is very costly. Thus we believe iTV launch will be delayed to end-2015 or early 2016 at the earliest.
Not only is establishing an iTV supply chain “very costly,” but we should have by now seen something – anything – indicating that someone in Asia is moving some huge 60-inch panels around. Thus far, we’ve seen zero evidence of iTV’s existence.
For what it’s worth, Apple’s boss did allude that his company may enter new product categories next year and we know from before that television continues to be “an area of intense interest” for the company and its engineers.
Despite – or in spite of these hints – Apple vehemently refuses to give us some specifics (as is their wont) and would only re-iterrate Steve Jobs’s words that the Apple TV is but “a hobby project”.
As for Gene Munster, of course he came out with a set of crazy predictions of his own!
According to a note obtained by Fortune’s Philip Elmer-DeWitt, Munster is conjuring up an eighteen percent boost to Apple’s overall revenues assuming a fifteen percent share of the connected TV market.
“That’s why we think Apple will do it,” he unbelievably said.
Seriously, that’s your reasoning?
If I were Munster, I’d never mention the Apple television thingie again.
Yet, Munster had the nerve to deadpan that “It’s an understatement that I’ve been wrong about the timing of the TV.” This particular analyst always sees the iTV coming “next year” so of course he’s now expecting the Apple television set in 2014.
Some of Munster’s other astonishingly misinformed predictions from his note to clients:
• “Apple will soon start lowering prices for older phones in emerging markets” because the iPhone is “growing slower” than market rates “because it’s priced too high for emerging markets”. I take it he didn’t get the memo that two-thirds of Android’s 81 percent smartphone share are junk phones selling for $215. I wonder when certain analysts will start thinking beyond market share and focus on – I don’t know – profitability?
• criticizing only 37 compatible apps, “which is pathetic,” he launched into this diatribe against Passbook: “If anyone can grab me afterward and explain what they love about their Passbook app, I would love to hear it because I’m struggling to find out what that is.” Passbook is of course useful only when you have some digital tickets, boarding passes and some such to manage. As such, Passbook is a mere convenience that will grow over time, not a headline feature.
• the iPad, he says, has “been struggling lately,” imagine that. And why? Because “innovation is more difficult on tablets” and because “prices in this market are particularly sensitive”. I don’t know, last time I checked the iPad was the best-selling tablet brand bar none, even after market reasearch firms like IDC shamelessly retroactively discovered tens of millions of ‘Other’ tablets just to deflate Apple’s market share numbers. On the ‘Apple can’t innovate no more’ suggestion: stop me if you’ve already heard this, but Apple is the only technology company in the world with own-designed 64-bit mobile chip, 64-bit operating system to go with it and 64-bit applications.
I’m not even mentioning other stuff like a larger-screen iPad in 2015 (“We believe that two sizes don’t fit all”), a five-inch iPhone next summer and more of the same.
Not sure how this guy makes a living analyzing Apple and being wrong so many times on so many counts, but he sure as hell is the laughingstock of real analysts.
Say an iTV does exist: would you consider a full-on TV set bearing the Apple logo?
Top and bottom iTV renderings courtesy of Martin Hajek.