5 Reasons Apple's TV Will Change the World

The Apple (Nasdaq: AAPL  ) iTV chatter has been quiet lately, and understandably so. The past few weeks have been full of real news about new MacBooks and iOS 6 updates to worry about unicorns, iTVs, and other fictional creatures.

However, now it's time to revisit the possibility that Apple's full-blown HDTV may be taking up space in early adopters' living rooms as early as this holiday season.

Yes, it could happen. Topeka Capital Markets analyst Brian White notes this week that a Chinese website, 21cbh.com, claims that contract manufacturer Hon Hai will be receiving Sharp LCD TV panels, probably intended for production of the iTV, during this year's third quarter. The shipment would give Apple enough time to get its inevitable smart TV on the market by the end of this calendar year.

The story isn't airtight, of course. We're talking about an analyst citing an obscure supply-chain watcher with a tidbit of information that may or may not have anything at all to do with the iTV. There are so many places where this rumor can crumble apart.

However, does it really matter if Apple rolls out its Web-enabled flat screens late this year or early next year? It's going to be a hit. Denying that point will only break your heart, so let's go over a few of the reasons a lot of people will be buying the iTV.

1. It's Apple. Duh.
After selling hundreds of millions of iOS devices, it's hard to question Apple's success. Cynics argued that the iPad was just a blown-up iPhone touch, but it changed the way we view tablets. The iTV is similarly going to change the way we view smart televisions.

Apple is King Midas with iOS until it proves mortal.

2. The iTV will be more than just a supersized iPad.
On a recent trip to Asia, White learned that Apple isn't simply blowing up the iPad. That would be silly. Who wants a touchscreen monitor? Not only do you not want a smudged screen, but who wants to get up to navigate a TV? That's so 1965.

It's been rumored for months that the iTV touchscreen element would be the remote control. That makes perfect sense. The remote would have an iPod component to navigate through the big screen.

3. FaceTime is just skin-deep.
White's also hearing that the Apple smart TV will feature a special motion-detection technology. Sounds a lot like Microsoft's (Nasdaq: MSFT  ) Kinect, right? Motions and gestures can trigger functions beyond the remote control.

However, just as all three of Apple's iOS lines come with user-facing cameras for FaceTime, it would follow that Apple's iOS-fueled television would have a pretty decent camera as part of the motion-detection technology.

As Microsoft's working with cable providers on a premium Skype promotion, Apple's likely to make a value-added feature on its TV. Consumer videoconferencing is about to get popular, the way corporate videoconferencing has over the years.

4. Content is king.
Netflix (Nasdaq: NFLX  ) has done a  great job of educating the market on the value of streaming TV shows and movies, but its digital catalog lacks the new releases and first-run shows that consumers crave.

Apple has already been reasonably successful with its iTunes video offerings, but now it's going to have the actual TV that serves video in its ideal environment.

Could it be that Netflix has stayed away from offering piecemeal rentals -- and Apple has refrained from offering unlimited digital-media smorgasbords -- as an unwritten truce? Obviously, consumers want both. Viewers want the deep library that Netflix can stream and the fresh content that Apple markets through iTunes. Apple's TV will probably either incorporate Netflix streaming and iTunes piecemeal rentals as the mother of all digital solutions, or the company will take on Netflix.

Either way, Apple already has the iTunes ecosystem ready to go.

5. Apple has learned from past mistakes.
Apple didn't put out the first smartphone or tablet. The class act of Cupertino simply raised the bar.

We've seen companies throw their weight behind smart televisions before home Wi-Fi was everywhere. We had Google (Nasdaq: GOOG  ) fumble its initial foray into Google TV by failing to strike the necessary deals for content. Apple, on the other hand, has had time to watch the field play out. It knows which paths to avoid, and that's why Apple will be a TV star sooner than you might think.

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

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns shares of Netflix and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 23, 2012, at 10:14 PM, gtbohrer wrote:

    Yup. You go ahead and bet on Apple's ability to break into an established business. It went so well with computers.

  • Report this Comment On June 24, 2012, at 9:58 AM, FredZiffl wrote:

    "The remote would have an iPod component to navigate through the big screen."

    I think this is wrong. You will to navigate on the big screen. You will navigate on the device, then send the selection to the tv.

  • Report this Comment On June 24, 2012, at 9:58 AM, FredZiffl wrote:

    You will NOT navigate....

  • Report this Comment On June 25, 2012, at 3:00 AM, wmcoverdale wrote:

    All the millions of existing HDTV sets can be used as monitors by any existing computer device with a video and audio output by a wired connection. If superior sound is desired you can run your HDMI or optical sound wire to your AVR, which will relay the video to your muted HDTV. Apple will never make a TV set to replace a display that it cannot improve.

    The need is for 1) a wireless connection to display your tablet, phone or computer to the AVR for better sound and the HDTV for a larger screen, 2) for a wireless control that will enable you to surf your internet and television content, 3) a wireless keyboard that will allow you to search and text messages, and 4) software that will be instinctive to all.

    Apple already has the hardware, AppleTV, presently enables a wireless connection to its tablets, computers and phones, and its wired HDMI connection to an AVR and HDTV set is not a problem.

    Everyone would prefer to watch their video or sporting events on a large HDTV screen or listen and share their music with family on larger speakers rather than earphones.

    What remains is for Apple to get the contracts from the music and movie industry to enable it to make money to justify opening up its proprietary system. If Apple doesn't do it Google or Microsoft will. If Apple does it, it will be done right.

  • Report this Comment On June 25, 2012, at 11:13 AM, dlchase24 wrote:

    These are some weak arguments in my opinion. I'm sure Apple is researching extending their living room presence beyond their AppleTV puck, but none of the arguments here create a solid argument for Apple actually releasing a display. In fact, if this is their only arguments, they shouldn't.

    1. The current AppleTV hasn't changed how we view settop boxes, why would an AppleTV Display change how we view smart TVs? Most people aren't even familiar with smart TVs, it's a relatively new product.

    2. The iPad IS over an oversized iPod Touch, it's just bigger. It doesn't do anything different. I do think a small screen iOS device will be used to control the large screen display, and I think that will be a trend with all TVs moving forward, but it won't be THAT unique.

    3. Problem with FaceTime is it can only be used on an Apple device. Apple needs to release this for Windows and see much great adoption. That doesn't help them sell hardware though, so it'll never happen.

    4. Content is king. Releasing it in a new package may prove difficult based on most reports. The biggest issue with this argument for an AppleTV Display though is Apple could test this with their current pucks. It's possible they could use the existence of the Display in numerous households as leverage to get better content distribution deals, but having them in place before the end of the year seems questionable based on most reports.

    5. There aren't enough products out to learn from their mistakes. Most people don't even know what a Google TV is, let alone what it does or does not do.

    Obviously Apple wants to establish a living room presence and change how we consume content in the living room. However, if the same old arguments I see are all that they have at their disposal, they'd be better off letting this rumor persist until they come up with something groundbreaking.

    Also, the british television conglomerate will never give up their ITV name, so let's refer to Apple's product as something it may actually be called.

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