[delish]

>But they do need to expand to feed the monster.

Take that as given, it still doesn't explain why, among all business opportunities, Apple picked 1 An area they had little experience in 2 That already serves its customers well 3 That is according to OP low margin.

On (2): Cell phones in 2005 were way worse than Netflix, HBO, ESPN were when Apple would have been market-researching Apple TV+.

[sircastor]

At the very least, the entertainment industry was familiar. They were already into the music scene for ~20 years, and had been cutting television content deals for about 15. It's not unreasonable to say that they knew some people they trusted whom they could hire to make it happen.