Apple Reportedly Shelved Plans to Make a Television Set, Focused on Content Delivery Today

Apple "quietly" shelved plans to make a television set more than a year ago, according to The Wall Street Journal. Citing sources "familiar" with the matter, the newspaper said that Apple decided it could not bring enough to bear on the television set industry to warrant entry. Apple is instead focused on launching a content delivery service.

The context for the report is Carl Icahn's open letter to Apple CEO Tim Cook released on Monday. In that letter, Mr. Icahn argued that Apple's stock is worth US$240 per share, almost twice its current value of $130.42 as of this writing. The notion that Apple would enter and "dominate" the television market—as well as the automobile market—was central to his thesis.

Enter The Journal's report late Monday evening, a report with all the earmarks of a controlled leak. The story has quite a few specifics, such as how Apple didn't officially kill the project, but instead disbanded the team, "with members sent off to work with different product areas."

At issue is the reality that the television set market is a highly competitive commodity market with low margins. On the one hand, those are exactly the kinds of market that can be ripe for disruption. Apple's chosen model for disruption usually includes better software and control over one ore more key technologies that allow Apple's device to be better. Apple apparently decided there wasn't enough meat on the bones it controls to warrant an Apple television set.

Technologies experimented with include video calling (not compelling enough), laser projected images on clear panels of glass (too power hungry and poor image quality), and 4K resolutions. None of what the team was working on was found compelling enough to bother with.

Apple is instead continuing to work on another much-rumored service, television content delivery. According to The Journal, Apple is focusing on this service and a revamped Apple TV as its entry into the television space. The article iterated an earlier report that Apple "hopes" to introduce such a service as early as June for launch in the fall.

The nature of this report—including its details—would explain the long running rumors that Apple was working on a television set. That Apple had a group working on the problem is why information leaked to news outlets and analysts like Gene Munster.

Note, for instance, that Mr. Munster dropped his quixotic quest for the Apple television set within the last year, in keeping with the time frame of the group's dismissal as laid out by The Journal.

At the same time, this backs up Walter Isaacson's quote from Steve Jobs, who told his biographer that he had "finally cracked" the interface for an Internet-connected television. That timeline fits The Journal's story on Apple's television group—hopefully Mr. Jobs's interface will still surface in Apple's revamped Apple TV settop box.

In short, all of the pieces we already knew fit The Journal's story, and that story absolutely feels like a controlled leak designed to squash Carl Icahn's claim. In fact, this feels a lot like Apple trying to kill this particular rumor once and for all.

For bonus points, note there isn't a controlled leak denying the other part of Mr. Icahn's open letter, that Apple would enter the automobile market by 2020.