The Wall St Journal is reporting that Apple has canceled plans to build a television set:
But after nearly a decade of research, Apple quietly shelved plans to make such a set more than a year ago, according to people familiar with the matter.
Apple had searched for breakthrough features to justify building an Apple-branded television set, those people said. In addition to an ultra-high-definition display, Apple considered adding sensor-equipped cameras so viewers could make video calls through the set, they said.
Ultimately, though, Apple executives didn’t consider any of those features compelling enough to enter the highly competitive television market, led by Samsung Electronics Co. Apple typically likes to enter a new product area with innovative technology and easier-to-use software.
I am not surprised. TVs are a tough business, as I've written before. The market isn't growing and the top manufacturers have difficulty sustaining even small profits. TVs aren't very profitable at least in part because it's difficult to create differentiated products that consumers will pay a premium for. It sounds like Apple experimented with several product features and new display technologies but ultimately couldn't come up with anything that consumers would pay premium prices for.
So now Apple will go to work on revamping the Apple TV streaming media box:
Apple is now focused on creating an online TV service and redesigning the Apple TV box, the people familiar with the matter said. It hopes to feature the new offerings at its developers’ conference next month, the people said.
I believe there is still plenty they could do with an online TV service and a redesigned Apple TV. Again from the WSJ earlier this year:
The technology giant is in talks with programmers to offer a slimmed-down bundle of TV networks this fall, according to people familiar with the matter. The service would have about 25 channels, anchored by broadcasters such as ABC, CBS and Fox and would be available on Apple devices such as the Apple TV, they said.
The idea is to offer consumers a “skinny” bundle with well-known channels like CBS, ESPN and FX, while leaving out the many smaller networks in the standard cable TV package.
Some media executives said they believed Apple was aiming to price the service at about $30 to $40 a month.
This could be a compelling alternative to a bloated cable bundle, but many opportunities and questions are up in the air. Will it include local affiliate broadcasts, of the news for example, and regional sports networks? Will it integrate intelligently with iTunes, Netflix/Hulu, HBO Now, etc? What will the final price be?
I think delivering this product through a streaming box and iOS devices is a better route to market than through a full television set. It will reach a larger market, can be upgraded more easily (perhaps for video games?), and may actually be more profitable than a full TV.
I also think this could open up the door for Apple to reinvent the pay TV bundle. They could use this as a distribution platform for smaller TV networks and content creators, either as an additional a la carte channel or as on-demand purchases. Everything cold be billed through iTunes, without the need to manage multiple subscriptions and payments. They also have the opportunity to bring Siri support and universal search to this device. A cloud-based DVR and/or on-demand feature could also be a great feature and keep the cost of the Apple TV box low because no local storage would be required.
These types of features are the future of TV I'm looking forward to. Hopefully we'll hear more at WWDC in June.