'An Apple Television Is Not An Insanely Great Idea'

Apple TV hand

Pacific Crest analyst Andy Hargreaves (via Forbes) says Apple should rethink building a television set if it doesn’t have anything special to differentiate its content.

The main problem, according to Hargreaves is, “We do not expect U.S. broadcast or cable networks to provide Apple content if it risks cannibalising existing revenue, which makes a unique Apple service and an Apple television unlikely.”

He adds, “An Apple television is not an insanely great idea … Numbers in a spreadsheet may make the television market appear attractive for Apple, but the reality is that Apple would have to bring something truly revolutionary to market in order to create disruption, gain share and generate substantial profitability from televisions. We believe the only thing that would make an Apple television worthwhile would be the introduction of unique content packaging and a user interface that allows consumers to find and watch TV shows and movies simply, quickly and on demand (preferably without commercials).”

Apple, for its part, is reportedly courting Hollywood to let it stream content onto its TV, though it’s unclear whether how successful these efforts have been to date.

Hargreaves also argues that the television will quite literally be a waste of space for the company in its retail stores. Based on a few generous assumptions about the profitability and size of the TV (46-inches), Hargreaves concludes that the television will generate less than 1/200th of the profit per cubit foot of retail space of an iPhone and just 1/50th the profit of an iPad.

If true, that would be an extremely inefficient use of space for a company that prides itself on efficiency.

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