Sorry, No Apple (AAPL) Full-Blown iTV On the Horizon
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Rating Summary:
45 Buy, 28 Hold, 9 Sell
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Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
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We've all heard about the still unannounced Apple (Nasdaq: AAPL) full blown TV set some have dubbed "iTV", but according to one analyst don't hold your breath.
JP Morgan's Mark Moskowitz said their research doesn't indicate any looming launch of a full-blown Apple TV set. "Despite the constant hum of media and investor speculation, we think any product entry will be measured in years, not quarters," the analyst states.
With the margins of the TV industry strained, they would be surprised to see Apple enter a new market unless the value proposition could support double-digit operating margins. "In TVs, that bogey is rather elusive, in our view," Moskowitz said.
Even Apple won't be successful in the TV market unless there is a radical change of the user interface, integration of the TV programming and data content, and use of gesture or voice control, the analyst contends. "Until such time, we are skeptical that end customers would be willing to pay the Apple premium for a TV," he said.
The "Apple Experience" is what matters most, the firm said. "We acknowledge that an integral part of the user's experience is Apple’s content offerings, but we think that the tight integration of hardware and software, industrial design, and ease of use are more important," they said.
If an Apple iTV is introduced it will likely be a two-stage, multi-year evolutionary transition, the firm speculates. The first step would be an expanded version of its current "hockey puck" Apple TV box, which could evolve into more of a set top box module over time. This won't happen to 2013 at the earliest, though, they said. The second stage could be a full-blown Apple TV with display and speakers. But this won't happen until at least 2014.
Instead of an iTV, Apple's next revenue engine could be a mobile payment platform, or "iPay," the firm suggests. "With this platform, we theorize that Apple users ultimately could pay for goods and services using NFC technology embedded in their iPhone or iPad and tied to an Apple account."
The firm maintained their Overweight rating and $715 price target on Apple.
Shares of Apple are up 0.4 percent today to $588.45.
JP Morgan's Mark Moskowitz said their research doesn't indicate any looming launch of a full-blown Apple TV set. "Despite the constant hum of media and investor speculation, we think any product entry will be measured in years, not quarters," the analyst states.
With the margins of the TV industry strained, they would be surprised to see Apple enter a new market unless the value proposition could support double-digit operating margins. "In TVs, that bogey is rather elusive, in our view," Moskowitz said.
Even Apple won't be successful in the TV market unless there is a radical change of the user interface, integration of the TV programming and data content, and use of gesture or voice control, the analyst contends. "Until such time, we are skeptical that end customers would be willing to pay the Apple premium for a TV," he said.
The "Apple Experience" is what matters most, the firm said. "We acknowledge that an integral part of the user's experience is Apple’s content offerings, but we think that the tight integration of hardware and software, industrial design, and ease of use are more important," they said.
If an Apple iTV is introduced it will likely be a two-stage, multi-year evolutionary transition, the firm speculates. The first step would be an expanded version of its current "hockey puck" Apple TV box, which could evolve into more of a set top box module over time. This won't happen to 2013 at the earliest, though, they said. The second stage could be a full-blown Apple TV with display and speakers. But this won't happen until at least 2014.
Instead of an iTV, Apple's next revenue engine could be a mobile payment platform, or "iPay," the firm suggests. "With this platform, we theorize that Apple users ultimately could pay for goods and services using NFC technology embedded in their iPhone or iPad and tied to an Apple account."
The firm maintained their Overweight rating and $715 price target on Apple.
Shares of Apple are up 0.4 percent today to $588.45.
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