New Rumor Claims Apple TV Plans On Hold in Favor of Wearables, Analysis

| Analysis

Apple TVApple's TV ambitions have been "put on hold again," according to unnamed sources cited by NPD DisplaySearch's Paul Gagnon. Those sources are in the TV industry's supply chain, and Mr. Gagnon speculates that Apple could be focusing on another long-rumored product entry, wearable computers (or wearables).

I'm a little ambivalent on this particular rumor, but it's being picked up far and wide on this holiday. Accordingly, I felt like I should explain my ambivalence.

First of all, the blog post itself is shy on detail. The core of the rumor is simply that supply chain sources said that Apple has put its TV ambitions on hold. The problem with that is that the supply chain never knows what Apple's actual plans are.

Apple is always ordering up components for test devices, and suppliers don't know what the big picture is going to be. Mr. Gagnon's source could be 100 percent earnest, honest, and passing on legit information to the best of his or her knowledge and it still not be representative of Apple's product plans.

Which is not to say that I think Apple is going to release an expanded TV product in the near future. Mr. Gagnon notes—and I agree—that the problem with Apple's TV ambitions is getting content deals from the U.S. TV market, which is comprised of a myriad of companies worried about upsetting the apple cart of their existing models and terrified that Apple will do TV so well that it ends up owning the customer experience.

You know, because the last point would somehow be bad.

But Mr. Gagnon also argues that the point of Apple's hardware is to sell more software, apps, books, music, TV shows, and movies. This is precisely and utterly backwards. The content exists to drive sales of hardware, not the other way around.

It's hard for me to buy into a rumor based on the interpretation of incomplete information when the author so fundamentally misunderstands Apple's very existence. Normally, that would be enough for me to ignore the rumor and move on, but since it's been widely picked up, someone needed to point out the problem.

I have caveats, though: NPD DisplaySearch is legitimately plugged into the TV industry. I have no doubt that Mr. Gagnon has a real source who gave him this information. But as we've seen for years, even legitimate sources in Apple's own supply chain—let alone a source in a supply chain that Apple isn't a part of—seldom have any idea of what Apple's end-game product plans are going to be.

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Comments

wab95

It’s hard for me to buy into a rumor based on the interpretation of incomplete information when the author so fundamentally misunderstands Apple’s very existence. Normally, that would be enough for me to ignore the rumor and move on, but since it’s been widely picked up, someone needed to point out the problem.

It seems that you might also have been in a generous mood, Bryan. Perhaps the holiday spirit is already upon you, and you rare extending a bit of peace and goodwill toward Monsieur Gagnon. Perhaps you’ll even extend that goodwill toward Sierra and Ainsley - assuming that they survived Halloween - and give them a bonus.

I concur with your reasoning here. It is difficult to devote too much attention, or invest too much stock, in any rumour, but particularly one about Apple from someone who obviously doesn’t understand the company.

Indeed, both pieces of speculation, namely that Apple are putting the much vaunted (by pundits) Apple TV on the back burner, and that Apple are putting more effort into wearable tech for the present,may be true; however the only relationship between these two facts, if indeed they are such, may be temporal - they occur at the same time. That does not mean that the relationship is causal, or even direct. There is a plausible argument to be made that, if anything, the relationship is coincidental, in every sense of the word; assuming,not course, that any of this is true.

mrmwebmax

+

But Mr. Gagnon also argues that the point of Apple’s hardware is to sell more software, apps, books, music, TV shows, and movies. This is precisely and utterly backwards. The content exists to drive sales of hardware, not the other way around.

Agreed completely. Regarding sales of hardware, which is Apple’s business model: How would a HD TV really fit in? Apple’s iOS devices—especially iPhone—get upgraded by consumers every two years, if not sooner for early adopters. Plenty here at TMO will be upgrading their iPads to the iPad Air. Macs live longer than PCs as a rule, but I typically upgrade every 4-6 years.

But a HD TV? That’s a pretty-much one-time purchase until it breaks. So I’m wondering how, if at all, that would fit into Apple’s business model of making money off of repeated sales of hardware, even if they do get all the content deals in place.

wab95

mrmwebmax:

I would not dismiss the notion of an HD TV fitting into Apple’s business model. The question is, how would it fit in, or more precisely, what role would it play in the Apple platform.

Clearly, such a device would buttress the consumption side of system, however I would see it specifically in terms of an enabler to other consumption purchases of Apple hardware by virtue of it making a compelling argument for Apple as the platform that brings together all of the essential features of a consumer entertainment content consumption package - a package characterised by interoperability of all devices supported by cloud storage and syncing.

As such, it would not need to be replaced every 2 years, rather more on the order of an iMac, or even less frequently, depending on price point and the robustness and adaptability (upgradability) of its feature set. By virtue of it sitting in your den or living room, it anchors your entertainment library, including movies, TV shows, music and books (games?), and drives you to purchase supplementary iOS devices that you are likely to replace more frequently (i.e. every 2 years), and which will likely sell more units and continue to be the main revenue source for Apple.

I think the primary thing holding this back is the content deals, as Bryan suggests above. Secondarily, I would argue that, if your suggestion above that Apple cannot make the TV support and strengthen the Apple platform, specifically on content consumption, then that too would be a deterrent.

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