Apple's New TV Is Going to Be Huge

By the time Apple (Nasdasq: AAPL) rolls out its rumored flat-screen television -- whenever that may ultimately be -- we may as well call it the iMunster.

After all, no one has championed the cause the way that Piper Jaffray's Gene Munster has. For nearly three years Munster has hopped on his horse, shouting to anyone within hearing distance, "The Apple HDTVs are coming! The Apple HDTVs are coming!"

He's been wrong, of course. However, now that even the late Steve Jobs revealed to his biographer that he had finally cracked the code on making television seamlessly simple, it's really just a matter of time before folks begin lining up at your local Apple store with hand trucks to roll out iTVs.

Speaking at Business Insider's IGNITION: Future of Media conference yesterday, Munster provided some more details on the device that may revolutionize the home theater experience.

He's sticking to his earlier forecast, calling for Apple's new product line to roll out in time for next year's holiday shopping season. He sees Apple being able to sell its next-generation flat screens for double the prevailing HDTV rate is at the time (which thankfully continues to get cheaper every passing year).

Munster feels that Apple will incorporate Siri's voice-recognition software to provide easy access to channels. Since Munster envisions an iTunes TV Pass that combines Apple's massive digital video vault with rudimentary local cable service, it's safe to assume that Siri would also fetch on-demand content and scour live programming. If you're DVR pioneer TiVo (Nasdaq: TIVO  ) or streaming champ Netflix (Nasdaq: NFLX  ) , now would be when you start worrying, even though Apple won't gobble up chunks of market share right away. You don't see an $800 TV for $1,600 and expect mass market penetration.

In a screenshot of Munster's presentation presented by Business Insider, he reveals how Apple can justify charging twice as much as comparable LCD sets. He tacks on the stand-alone costs of a Blu-ray player, DVR, audio receiver, and game console to make up the difference in price.

Are we really supposed to believe that Apple will stick an optical disc drive in this thing? If an $80 Blu-ray player dies you can toss it out. What happens if a Blu-ray drive goes bad on the iMunster? What happens when Blu-ray becomes an obsolete platform?

I can believe the DVR, but does this mean that Apple will be paying patent royalties to TiVo, or is another legal battle brewing? As for the game console, I think die-hard gamers would beg to differ in comparing simple iOS apps to full-blown video games -- and that's before we get to the sticky issue of App Store's touchscreen games on a flat screen. Even if the remote is an actual touchscreen (and it probably should be so that it can be perpetually updated), you're not going to get a similar gaming experience (and developers will really have to optimize their graphics for the gargantuan screens).

I'm not going to lie: If and when Apple finally introduces the iMunster, I will be an early adopter. Apple is smart enough to sidestep the mistakes made by Google (Nasdaq: GOOG  ) -- and I have a Google TV as well -- by playing nice with the content makers from the start. If it can simplify the tower of gadgetry and spaghetti bowl of cables that plagues way too many living rooms to deliver a bar-raising device, you'd be an idiot to deny Apple a shot here.

If you want to see how this all plays out, track the latest developments by adding Apple to My Watchlist.

The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Netflix, Google, and Apple, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (8) | Recommend This Article (2)

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  • Report this Comment On December 01, 2011, at 10:23 AM, techy46 wrote:

    Well, we'll have aTV, iTV, leTV, playTV and xTV by this time next year. Wonder who will get relationship with DirectTV or DishTV? Can't imagine paying $2000 for an iTV when I can have DirectTV and 52" LCD for half the price.

  • Report this Comment On December 01, 2011, at 11:10 AM, DanRayburn wrote:

    I don't get why anyone listens to Gene Munster when it comes to Apple. For years he's been preaching about how good an Apple TV will be, even though it does not exist. He repeats the same thing year after year, hoping one of these days he will be right. Anyone can predict the same thing for 4-5 years.

    Also, he's crazy to think consumers will pay 2x the going rate for an Apple TV. Sony and other TV manufactures have lost tons of money on TV sets that are on average, 25% more expensive than guys like Vizio. So they have not been able to get consumers to buy a more expensive set and as a result, have slashed TV prices (http://bit.ly/q7bJ3k). Consumers will NOT pay 2x more for an Apple TV in any large quantity.

  • Report this Comment On December 01, 2011, at 12:33 PM, wh00dat wrote:

    It'll be fun to compare all this hypothetical analysis with fact when Apple ultimately launches the AppleTV. I'm still not convinced that they want to sell the screen. The screen quality and performance aren't the problem, the integration with content sources and ease-of-use are the problem and that's exactly the type of problem that Apple is genetically wired to solve.

    My bet is is that this is a Tivo killer first, and a way to move towards basic television services with true a la carte pricing on top of that (how many times have we heard people say that they wish they could only pay for the channels they want?). Add some Siri and typical Apple elegance and this will be a big deal at WAY less than $1600 (I'd bet $200-300).

  • Report this Comment On December 01, 2011, at 12:42 PM, SkippyJohnJones wrote:

    @Dan Rayburn, I beg to differ. Anything Apple makes WILL carry a hefty premium and WILL sell in volume. Now, 2x the price is steep - but keep in mind $1600 was more than reasonable for a 52" TV just last year. The key will be the inclusion of several (exclusive) killer features, particularly in the interface. If Apple can conjure a way to allow iTV users to scale down to minimum cable (to preserve live sports and news coverage and local programming) and feed the rest direct from content providers a la carte (via apps), they will offer a significant savings over time to the average user that should justify a big chunk of the premium. This approach would somewhat appease the cable providers by not trying to eliminate them altogether - this is key because without any TV revenue, cable companies will likely gouge customers on internet access.

    *Blu-ray will never be included on iTV. Steve Jobs famously referred to Blu-ray as a "bag of hurt" due to its complicated licensing. I think Munster is pointing to the savings of streaming video with NO optical disc.

  • Report this Comment On December 01, 2011, at 2:56 PM, AceInMySleeve wrote:

    "rumored flat-screen television"

    Flat screen! I'll believe it when I see it.

  • Report this Comment On December 02, 2011, at 9:50 AM, cfrdog wrote:

    TV's aren't iphones which are replaced every 2yrs. I won't be replacing my TV for at least 10yrs. Getting into the TV business is a bad move, set top box is where its at. they should buy TIVO and move forward w/ that.

  • Report this Comment On December 02, 2011, at 10:08 AM, DJDynamicNC wrote:

    I honestly don't know how I feel about this. I see your point, but I also see the opposing side. I'm just not informed enough on this topic to make a call on whether Apple TV will be any good, or be successful in the market (not always the same thing).

    I can't imagine buying such a device, but I don't even have a regular TV of any type. I don't know what it would take to get me to purchase one of these; I am pretty attached to my desktop and don't really see a need for a different interface at this time.

    Perhaps I'm just getting old and settling in to my ways.

  • Report this Comment On December 02, 2011, at 1:04 PM, cybervinnie wrote:

    Unlike the iPhone or iPad, the TV screen, in and of itself, is completely passive as it relates to the user experience, which is why Apple won't sell a TV screen. If Apple wants to revolutionize the TV experience, focus on the interaction (the remote) and content delivery (e.g. dvr, a la carte channels, streaming, etc.).

    In my mind, Apple should just buy TiVo and focus on set-top boxes and remotes.

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