[mikeash]

It just fundamentally makes no sense to me. The TV business is just too small. Even if Apple magically took over 100% of the market, it would still be small potatoes for them, and there's appears to be little room to grow the market as a whole. It's saturated.

I could well be wrong, and I'll happily admit it if it turns out that way, but for the moment I just don't get why so many people insist that Apple is going to get into the TV business.

[gnaffle]

There are a few things wrong with this assumption:

1) Apple exclusively looks at potential revenue when introducing a new product. That they introduced and still sell the Apple TV even though it's still just a "hobby" pretty much negates this assumption.

2) You look at the _current_ TV market and conclude that it's too small. You could have looked at the smartphone market in 2007 and made the same argument against launching the iPhone. What happened instead was that the iPhone had mass market appeal, and smartphone market share exploded.

If Apple is somehow able to do to the TV market what they have done to the smartphone and tablet markets, they don't need to worry so much how the existing TV market looks like and whether that market is saturated. They only need to worry about whether the product is something enough people want to buy.

[mikeash]

1) Well, I'm really addressing the idea that an Apple TV would be Apple's "next big thing", which is almost always how it's presented. People aren't talking about Apple selling TVs as a hobby, they're talking about Apple selling TVs as their next huge product line. If Apple comes out with a "hobby" TV product that has no significant influence on their balance sheet, I'll consider myself correct on this one.

2) I addressed that in my comment with "appears to be little room to grow". Unlike the smartphone market, everybody, and I do mean everybody, already owns a TV. Maybe there's some secret sauce that can make a lot of those people buy new TVs, but it seems unlikely. Keep in mind that while Apple massively grew the smartphone market, they're still minuscule compared to the overall mobile phone market. It looks amazing at first blush that Apple is selling ~100 million smartphones a year when that was the size of the entire market in 2007. But it's substantially less amazing, IMO, when you consider that the mobile phone market overall was over a billion units/year in 2007. Apple really just nibbled a small portion of the larger market. I'm having trouble finding decent figures for the global TV market, but it looks to be vastly smaller than the mobile phone market was in 2007, let alone in 2012. Unlike smartphones, there's no larger market to convert people from, and people mostly already own enough TVs.

[gnaffle]

I think the point to note is that _everybody_ owned a cell phone before the iPhone as well. If you look at revenue share of the mobile market, I think Apple and Samsung now dominate the entire mobile market because smartphones have higher margins (Nokia dominated previously).

Likewise, the iPad grew independent of whether the PC market was saturated or not, in such a way that the industry now separates it into a "tablet" market. But of course, people are doing stuff on tablets that they could have been doing on laptops.

I agree that if they are to sell it as their next huge product line, it has to be more than a regular Apple TV in a frame. They have to do something similar to what they did to the PC market with the iPad, and that's not easy to do in the TV market. What it needs to be, and whether Apple will pull it off, I don't know.

[josephlord]

While I agree it isn't necessarily an obvious move I disagree on the reasoning. The volume and total value is there but margins are small and the existing products are already physically stylish and offer a lot of features (although there is room to improve on the UI).

If Apple could come in and get their usual margins and take a noticeable market share it would be worth it.

http://bgr.com/2012/07/23/samsung-lg-lcd-tv-sales-market-sha... - first useful link googling TV market size.

44M TVs in Q1 (low season in Europe and US but quite a big one in China due to New Year) of which Samsung took 19%. If we assume average price of $500 (maybe 50% of that number are small 24" and less cheap TVs) and a conservative total of 160M TVs annually it is about an $80BN market. If Apple could get 5% of that it is still $4BN annually or about what they get from iPods or 2/3 of what they get from Mac desktops. And if they go for it I'm sure they would be aiming for at least 5% of the market.

The other bonus is that maybe half of that share would come from Samsung who is not only the biggest manufacturer overall but winning at the top end too. This would hurt Samsung more than a billion dollars from a lawsuit.