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Is This Apple's Next Big Idea?

Tim Beyers
February 10, 2009

Apple (Nasdaq: AAPL  ) investors are notorious for having an appetite for The Next Big Thing. Can you blame them? The iEmpire has a history of delivering winners -- the Mac, the iPod, and the iPhone, to name three.

Could an iTV be next? No, not Apple TV but iTV, a full-screen digital television with iGoodness baked in. In a recent interview, Piper Jaffray analyst Gene Munster told Macworld UK to expect an Apple-branded TV soon.

I want my iTV
"Apple's fantastic ability to create exceptionally user-friendly products could revolutionize TVs just like the iPhone changed the mobile phone market," Munster said.

There's more than conjecture at work here. Munster points to a $500 million deal in which a unit of South Korea's LG Group will supply Apple with a substantial number of LCD panels at what appear to be very favorable terms.

"LG Display has made a long-term agreement to supply a massive amount of LCD to Apple in the face of uneasy condition of foreign capital inflow amid the global economic downturn," company executives said in a statement.

It's the second time -- that we know of, at least -- Apple has sent out for Korean. The last time, in 2005, the iEmpire prepped for demand for its newest iPods by signing a volume flash memory deal with Samsung. Smart move. By early 2006, Apple was moving more than 14 million music players per quarter. It has dominated the market ever since.

Why past might not be prologue this time
Would Apple fare similarly in the TV market? Honestly, I've some serious doubts. Dell sells them, but what you'll find at isn't all that different than what you can get from any electronics retailer.

But don't take my word for it. The top offer at's TV and TV accessories store is a 52-inch display from Sony (NYSE: SNE  ) . TV is a checklist item. "You need a big screen, sure we have that. A PC? Yep, we have that, too."

To be fair, Apple does this as well. Go into any of its retail stores and you'll see Apple TV playing on large-screen monitors supplied by third-party vendors. Munster obviously thinks Apple can do better. So do I.

It'll have to. Competition in digital TV is already fierce and getting fiercer by the day. Here's a look at four current and prospective combinations that would hinder adoption of an iTV.

MicroFlix. The obvious choice. Not only is the Xbox a popular platform for gaming, it has become a personal entertainment center. And now, it streams Watch Instantly videos from Netflix's (Nasdaq: NFLX  ) growing library.

The weakness of this pairing is that the Xbox is a game console, and most consoles are built for a two-to-three year upgrade cycle. Would consumers really want to swap out their entertainment center every couple of years? Probably not. A MicroFlix tube wouldn't have that issue.

GooVo. I've thought Google (Nasdaq: GOOG  ) should buy TiVo (Nasdaq: TIVO  ) since 2005. It hasn't happened, but that doesn't mean it shouldn'