At their unveiling event, Apple (AAPL +0.11%) announced that it's adding 4K HDR to its TV line, which left a lot of investors and consumers underwhelmed.
In this Industry Focus: Tech podcast segment, host Dylan Lewis and senior tech specialist Evan Niu discuss a few reasons why Apple might have been so late to the 4K HDR game, how much the new TVs will cost and when they'll be available, and more.
A full transcript follows the video.
This video was recorded on Sept. 15, 2017.
Dylan Lewis: Evan, they've also unveiled an update to the Apple TV line.
Evan Niu: That's right. Apple TV, they added 4K HDR, which I think is kind of just keeping up because that's becoming the standard now. This move I didn't think was particularly exciting, just kind of catching up with what's out there already. As far as the hardware was concerned, that's about it. There's no big updates to Apple TV hardware. And of course, they're always building out the operating systems and features and functions there, but that's available across all their devices. It depends on if you even have a 4K HDR TV. For example, I don't, so I have no need for it and would not buy this device because it would literally be useless for me. And over time, that changes as people upgrade to 4K HDR TVs. But TV upgrade cycles are pretty long, usually about 5 to 7 years before you buy a new TV. It just takes a longer time for that 4K adoption to pick up, just because people don't buy TVs every two years like they do for smartphones.
Lewis: Yeah, and that upgrade cycle is a great point. In a lot of ways, Apple is late to the 4K party. You have all of these other streaming devices that are available and actually coming in at a lower price point. They're kind of a late mover in this sense, and they're doing it with a more expensive device. They might not really get dinged for it all that much if most of the market doesn't have 4K HDR TVs anyway, at this point, and they're making it available for when that wave comes on. But, for the folks who do have 4K enabled television at this point, there are a lot of other pretty solid options out there that sell for a far lower price.
Niu: That might also be why they felt they had the luxury to wait, because they know that not everyone has 4K TV, so maybe that's why they were like, this isn't a priority, we can wait on this a little bit, even if everyone else is beating us to it. Not everyone has 4K TVs, so maybe that's why they took their time.
Lewis: Yeah. And that actual price point is $179 for the 32 gig option, $199 for the 64 gig option. Like the updates to the Apple Watch line, they will be available for order on 9/15 and actually available the 22nd. As a reminder, we talk about these two segments, the Apple Watch and Apple TV, both of those have their revenue build into the other products category, where it's lumped Beats, accessories, and a lot of other of Apple's smaller businesses. And that total segment revenue is only about 5-6% of Apple's top line. We talk about the updates that are coming here and what it might eventually lead to in terms of market size and things like that, it's still kind of a drop in the bucket for them.
