Analyst: Design, UI, Apps & Games Will Make Apple Television Revolutionary, Not Content

A couple of days back we told you about how Piper Jaffray’s Gene Munster, a long time Apple analyst, was confident that an Apple Television is now just a matter of “when” rather than “if.”

Business Insider has the entire note from Munster in which he speculates that Apple’s software offering with the television will make it revolutionary. 

Firstly, Munster believes that Apple won’t just enter the television market and right away convince content providers to agree with Apple’s terms:

While many believe content will be the key differentiator for the Apple television, we expect at launch Apple may not necessarily revolutionize the content industry. Ultimately we believe that consumers and Apple want unbundled channels and more options including time shifting to watch content, but note that content owners are hesitant to change. For example on the Disney Mar-12 earnings call, CEO Bob Iger suggested that unbundling channels would make cable bills more expensive. Our take is consumers are willing to pay more for each channel as long as their overall bill goes down (i.e. pay more for fewer channels you actually want). The bottom line is that we believe in five years Apple will have a significant hand in changing how people consume content on their TV. We know the end point, unbundled channels and DVR in the cloud. However this will take time (3-5 years.), and while we believe Apple will innovate on its existing TV content offering at the launch of Apple Television, we caution that the initial offering may more closely resemble the current Apple TV content offering (Netflix, iTunes, and eventually Hulu).

Instead, Munster believes that Apple will play to its strengths and deliver a killer software experience, just like it did with the iPhone:

We expect the TV to include Siri and compatibility with third party devices as well as potential integration with content guides, offering consumers improved control which should lead to greater value from their monthly cable subscription. We note that cable companies could charge a fee for consumers to use Apple Televisions ($5-10/month similar to cable box rental fees). Some investors do not believe Apple will be able to gain control of cable interfaces due to advertising on the interface, but we note that the ads are typically house ads and are not significant revenue contributors.

Then there’s of course the idea of Apple bringing the vibrant iOS and Mac developer community to the television platform to create great apps for the big screen. Rumors have it that Apple would be holding sessions during WWDC to brief developers with an OS for the television. Munster believes that through the App Store, Apple would also address the demand for great games on a large screen. These games could be controlled by voice, other iOS devices and even motion sensing.

apple tv

The television would obviously have great hardware design like all other Apple products, including aluminium casing and minimal wires. As we’d written yesterday, Munster expects the pricing to be somewhere in the $1,500-$2,000 range for a screen size in the 42″ to 55″ range.

A lot of this would be much clearer after WWDC where it is rumored that Apple will unveil the operating system for their upcoming television set.

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