Analyst Sees Apple HDTV in Near Future

13 Jul, 2011 By: Chris Tribbey

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Calling Apple’s entry into the HDTV market “eventual,” UBS Investment Research analyst Maynard Um said in a research note that the company could increase its market capitalization by as much as $100 billion if it goes where it hasn’t gone before.

“The television set is the one screen where the company is still lacking (despite its Apple TV product),” Um wrote. “We believe Apple is most likely to target the fusion of TV and [set-top box] market, the connected TV, as it enables Apple to add value through its innovative hardware/ease of use, iTunes ecosystem and provide a better overall consumer experience.”

As early as 2012, Apple-branded connected HDTVs could be a reality, Um writes, with Apple able to leverage iTunes and its content relationships to take a large slice of the HDTV market.

“We believe Apple is not under pressure to pay the lowest price for content in order to secure fatter profits,” Um wrote. “Rather, we see the content as drivers to secure fatter profits from further hardware sales. In time, we expect Apple to secure enough content to enter the television set market with enough differentiation without having to rely on others for content.”

Um pointed to the $99 Apple TV set-top as a precursor to an eventual Apple HDTV product line. He suggests that if Apple did move into competition with the likes of Samsung, Sony and LG, the company’s combined hardware and content offering could lead to true pay-TV cord-cutting by consumers.

“Apple could use its cash position to secure a large amount of digital video content from studios or even purchase its own original content for a service similar to Netflix,” Um wrote. “The service could offer unlimited streaming capabilities of catalogued and premium content to subscribers for a monthly fee.

“Apple has the infrastructure (new data centers), content delivery mechanism (iTunes) and consumer hardware (Apple TV, iPhone, iPad and iPod) to do so.”

Conversely, Apple could decide to work with established set manufacturers to embed Apple TV on HDTVs, Um wrote.
 

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