Apple is reportedly considering making a television set, but don’t get your hopes up. There are simply too many reasons why Apple won’t make a TV. Like so many things, it all comes down to profits (and the lack thereof).
You need look no further than Apple’s set-top box and monitors to see why an Apple-branded television isn’t going to happen.
We’ve been here before
Last week, Bloomberg’s Mark Gurman said the Mac-maker is “evaluating” an Apple-branded television set. But not for the first time. This Sunday, a follow-up from Gurman said the company explored making a television shortly after the launch of the iPad back in 2010. Just not a traditional one.
“The idea was to make something with a huge display that could be nestled into a stand for TV viewing, but also serve as a touch-screen Mac or giant iPad if needed,” he wrote.
But the company stuck with Apple TV, a set-top box much like the television the company had considered — but minus the screen. The Apple TV app that came along later is an even more stripped-down option.
But Apple is reportedly once again looking into making a television, apparently as part of a new move into smart home devices.
Slim profits explain why an Apple television is very unlikely
If any of that from Gurman makes an Apple-branded TV seem possible, it’s time for some pessimism.
One cause for doubt comes from Ross Young, CEO of Display Supply Chain Consultants.
“I am not aware of any plans for Apple to sell TVs,” he told me. While Gurman earned a reputation for accuracy in predicting future products from Apple, so did Young, thanks to his many sources inside companies that make screen panels.
And Gurman himself threw cold water on any potential excitement about any such product from Apple. “TVs are a low-margin industry, and consumers don’t buy new ones very frequently.”
Young added some detail to that, showing me that profit margins on TVs from Samsung, LG, Sony and TCL range from around 5% to 10%, though lower than that isn’t unusual.
“Margins are low and seasonal,” Young said. “Certainly well below where Apple would like to be.”
Gurman pointed out in his most recent report that some Apple products achieve profit margins in the 40% to 60% range. The company is surely not interested in producing an Apple television to enter a market segment where the profit margin hovers closer to 5%.
Especially when people buy new TVs so infrequently. I have a nice one from 2017 that still works great. I see no reason to replace it … and I’m a guy who gets a new iPhone every year and a new iPad every two years.
Plus, TVs are commodities. Whether you get one from Samsung, Sony, LG, etc., it’ll look just about the same. It’s not a market that Apple can jump into with a significantly better product that justifies a higher profit margin.
Consider Studio Display and Apple TV set-top box
For proof, consider that, if you really want to, you can own an Apple television today. Just pick up a Studio Display. Of course, the price starts at $1,599. For comparison, the Asus ProArt 5K with similar specs costs $799.
For watching streaming video, hook up the Apple TV 4K set-top box to the Studio Display. The set-top box starts at $129. (Alternatively, you could buy a Roku Express 4K+ for $40.)
So the Apple-branded television solution costs $1,728 while the Asus/Roku option is $839. In other words, the third-party alternative comes in at less than half the cost.
True, both setups don’t offer exactly the same experience. The Apple monitor comes with a higher-quality stand, and Apple’s set-top box provides faster performance and some extra features. But the difference hardly justifies double the cost.
I’m no marketing genius, but Apple has such people working for it. They’ll surely tell Apple CEO Tim Cook that an Apple television would be an unprofitable money pit for the company.
