Greg's Bite: No Margin, No Apple TV Set
TweetFollow Us on Twitter

Greg's Bite: No Margin, No Apple TV Set

Posted by Greg Mills

Those who predict Apple products tend to be wrong as often as they are right. Apple is famously secretive in its product development, for very good reasons. First the free publicity is worth millions when the curtain is drawn and months of speculation comes down to "oh, one last thing". If Steve Jobs had any fun in life that really mattered to him, it was in making monkeys out of the competition and us Apple tech writers in releasing the latest Apple device that we got wrong.

The second reason for the dark drapes of secrecy in Apple product development is that from the first products Apple put out years ago, the competition has reversed engineered or just plain stolen Apple's marketable ideas. Patents and trade secrets are the second line of defense as secrecy is the first. The competition hears about the latest Apple products at the public release and have no time to duplicate Apple products for some period of time, hopefully until the next version of the Apple device is ready to roll out.

The iPad is an example of the copy cats not keeping up. Just ask the "me too" tablet computer makers out there. By the time they even match the current hardware Apple has released a year back, Apple raises the bar again. "Flummoxed" is Steve Jobs word for the incredibly hard row to hoe Apple competitors face.

Thus, an early public release of Jobs plans for Apple to launch a full blown TV set runs counter to history. Steve knew his biography would be scoured by friends and foes alike for hints as to what is going to happen next in Apple's product line. With public crucifixion with rusty nails the penalty for leaking unreleased product information, would Mr. Jobs, himself publicly release Apple Television information a couple of years before the product is due to be released?

While the notion of a high end Apple HDTV set, created from scratch by Apple sounds incredibly cool there are interesting details that enter into the situation that in my mind run counter to the recent flood of publicity about Apple's TV plans being a foregone conclusion.

1. The margins on Apple products run much higher than any competitor. Apple has sharpened its pencil in supply chain purchases and due to being the largest consumer of electronic parts, they demand and get the first shot at using new parts and also get great prices due to volume and shear negotiation skills. HP decided to get out of manufacturing PS due to the approximately 7% margin common to the PC market. Apple has margins on the Mac of closer to 25%. Recently, HP announced that they might stay in the low margin PC manufacturing business after all. Flip, flop, flip... Sounds like NetFlix, managing their business by reacting to public outrage.

2. Steve Jobs indicated his breakthrough was in the control of HDTV content, which is in line with the current Apple TV product. Why not upgrade the Apple TV product to include DVR and cloud features that would make any HDTV work as in Steve's vision? The large HDTV LCD displays are expensive and now just a commodity item. Margins on large screen TVs run under 10% and the prospects some bloggers have suggested of Apple getting twice the going price for their TV products at retail is not realistic, in my mind. The only thing that would change the calculous would be a revolutionaly breakthrough in display technology that Apple owns.

3. What I think is coming is a tremendous upgrade to Apple TV that includes Apple magic in some sort of HD DVR that anticipates what you will want to watch and is controlled over the internet by Siri voice commands. If the new Apple TV box could replace all current satellite or cable boxes and get Apple into the big time in streaming video content, low margins in Apple TV products could be maintained, betting on the download generated profits. That would not require building and shipping large low margin TV display products. Apple wants to sell digital content as that is a long term income rather than a complicated high cost low margin product which runs counter to all we see Apple selling. The giant server farm Apple built will not stay idle, you can bet on that.

I could be dead wrong. I have been advised by my wife that there is a Greg Mills distortion zone, but she assures me I am the only one confused by it... Will I eat an Apple HDTV if they ship one? No, but I might buy one. I would certainly buy an enhanced Apple TV DVR product which I suspect is actually what is in the works. That is Greg's Bite

 
AAPL
$102.13
Apple Inc.
+1.24
MSFT
$44.87
Microsoft Corpora
-0.14
GOOG
$571.00
Google Inc.
-6.86

MacTech Search:
Community Search:

Software Updates via MacUpdate

Cocktail 7.6 - General maintenance and o...
Cocktail is a general purpose utility for OS X that lets you clean, repair and optimize your Mac. It is a powerful digital toolset that helps hundreds of thousands of Mac users around the world get... Read more
LaunchBar 6.1 - Powerful file/URL/email...
LaunchBar is an award-winning productivity utility that offers an amazingly intuitive and efficient way to search and access any kind of information stored on your computer or on the Web. It provides... Read more
Maya 2015 - Professional 3D modeling and...
Maya is an award-winning software and powerful, integrated 3D modeling, animation, visual effects, and rendering solution. Because Maya is based on an open architecture, all your work can be scripted... Read more
BBEdit 10.5.12 - Powerful text and HTML...
BBEdit is the leading professional HTML and text editor for the Mac. Specifically crafted in response to the needs of Web authors and software developers, this award-winning product provides a... Read more
Microsoft Office 2011 14.4.4 - Popular p...
Microsoft Office 2011 helps you create professional documents and presentations. And since Office for Mac 2011 is compatible with Office for Windows, you can work on documents with virtually anyone... Read more
TextWrangler 4.5.10 - Free general purpo...
TextWrangler is the powerful general purpose text editor, and Unix and server administrator's tool. Oh, and also, like the best things in life, it's free. TextWrangler is the "little brother" to... Read more
BitTorrent Sync 1.4.72 - Sync files secu...
BitTorrent Sync allows you to sync unlimited files between your own devices, or share a folder with friends and family to automatically sync anything. File transfers are encrypted. Your information... Read more
Cyberduck 4.5.2 - FTP and SFTP browser....
Cyberduck is a robust FTP/FTP-TLS/SFTP browser for the Mac whose lack of visual clutter and cleverly intuitive features make it easy to use. Support for external editors and system technologies such... Read more
Tinderbox 6.0.3 - Store and organize you...
Tinderbox is a personal content management assistant. It stores your notes, ideas, and plans. It can help you organize and understand them. And Tinderbox helps you share ideas through Web journals... Read more
Adobe Photoshop CC 2014 15.1.0 - Profess...
Photoshop CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous Photoshop customer). Photoshop CS6 is still available for purchase (... Read more

Latest Forum Discussions

See All

Invaders! From Outer Space Review
Invaders! From Outer Space Review By Rob Thomas on August 27th, 2014 Our Rating: :: RETRO NOSTALGIAUniversal App - Designed for iPhone and iPad It’s a shame that Invaders! doesn’t offer deeper gameplay, as this retro-inspired... | Read more »
Spooklands Review
Spooklands Review By Jennifer Allen on August 27th, 2014 Our Rating: :: ONE-TOUCH SHOOTERUniversal App - Designed for iPhone and iPad One-touch simultaneously controls your direction and your weapon in this unique arena shooter.   | Read more »
Heroes of Order & Chaos Add Twitch I...
Heroes of Order & Chaos Add Twitch Integration, New Heroes, and More Posted by Ellis Spice on August 27th, 2014 [ permalink ] | Read more »
Foodie Yama Review
Foodie Yama Review By Jennifer Allen on August 27th, 2014 Our Rating: :: BRIEFLY HOOKSUniversal App - Designed for iPhone and iPad Foodie Yama will draw you in for a brief while, and you’ll never be entirely sure why.   | Read more »
Spotify Connect Turns One, Now Supports...
Spotify Connect Turns One, Now Supports New Devices Posted by Ellis Spice on August 27th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
The Rise of PicsaStock and How You Can M...
We all take plenty of photos, right? That’s the joy of having a reasonably powerful camera in your pocket, thanks to your trusty iPhone and a bevy of similarly useful apps. Wouldn’t it be great to make some money out of those snaps? While your... | Read more »
Appointment With F.E.A.R Review
Appointment With F.E.A.R Review By Jennifer Allen on August 27th, 2014 Our Rating: :: CAMP DELIGHTUniversal App - Designed for iPhone and iPad Ever wanted to be a superhero? Appointment With F.E.A.R is a fine way to live that dream... | Read more »
Ultra Drift Review
Ultra Drift Review By Rob Thomas on August 27th, 2014 Our Rating: :: ULTRA DULLUniversal App - Designed for iPhone and iPad Ultra Drift is fine in concept, but the execution runs head-first into the wall. And so will you. Over and... | Read more »
Star Walk 2 is Like Stargazing with Neil...
Star Walk 2 is Like Stargazing with Neil DeGrasse Tyson in Your Pocket Posted by Jessica Fisher on August 27th, 2014 [ permalink ] | Read more »
Watch the World Go By Really Fast with I...
Watch the World Go By Really Fast with Instagram’s New Hyperlapse Posted by Jessica Fisher on August 27th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »

Price Scanner via MacPrices.net

The iPad’s Real Competitive Challenger (Not S...
It’s been my contention for some time that the iPad is suffering from something of an identity crisis, and I suspect that may be a factor in slackening sales this year. Apple can’t seem to decide... Read more
13-inch 2.6GHz/256GB Retina MacBook Pro on sa...
B&H Photo has the 13″ 2.6GHz/256GB Retina MacBook Pro on sale for $1379 including free shipping plus NY sales tax only. Their price is $120 off MSRP. Read more
Life Inventory iOS Apps – Learn to Know Thyse...
James Hollender’s Life Inventory apps s are now on sale with 20% off thru Labor Day, 09/01/2014. This is a great opportunity to get started on that Moral Inventory you’ve been putting off doing for... Read more
Pocket Watch, LLC. Reveals Cloud Server For P...
Beaumont, Texas based Pocket Watch, LLC. has announced the availability of its new ActivePrint Cloud Server Powered by Raspberry Pi. With this small standalone box almost any USB printer or available... Read more
902it Simplifies Area Code Changes For Nova S...
The east coast Canadian provinces of Nova Scotia and Prince Edward Island are phasing in 10 digit telephone dialing, to be fully in place by November, in order to accommodate a second area code to... Read more
Boomerang iPad Stand Mounts Your iPad Anywher...
Boomerang, a Mountable Stand with Multiple Viewing Angles, is now available for iPad Air. Boomerang combines several functions that aim to expand your iPad’s potential in one, elegant product. The... Read more
Retina MacBook Pros available starting at $10...
The Apple Store has Apple Certified Refurbished 13″ and 15″ MacBook Pros available starting at $929. Apple’s one-year warranty is standard, and shipping is free: - 13″ 2.5GHz MacBook Pros (4GB RAM/... Read more
Apple 27-inch Thunderbolt Display (refurbishe...
The Apple Store has Apple Certified Refurbished 27″ Thunderbolt Displays available for $799 including free shipping. That’s $200 off the cost of new models. Read more
Apple offers free $25 iTunes gift card with p...
The Apple Store is offering a free $25 iTunes Gift Card with the purchase of a $99 Apple TV for a limited time. Shipping is free. Read more
Apple’s 2014 Back to School promotion: $100 g...
 Apple’s 2014 Back to School promotion includes a free $100 App Store Gift Card with the purchase of any new Mac (Mac mini excluded), or a $50 Gift Card with the purchase of an iPad or iPhone,... Read more

Jobs Board

*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
Senior Event Manager, *Apple* Retail Market...
…This senior level position is responsible for leading and imagining the Apple Retail Team's global event strategy. Delivering an overarching brand story; in-store, Read more
*Apple* Solutions Consultant (ASC) - Apple (...
**Job Summary** The ASC is an Apple employee who serves as an Apple brand ambassador and influencer in a Reseller's store. The ASC's role is to grow Apple Read more
Project Manager / Business Analyst, WW *Appl...
…a senior project manager / business analyst to work within our Worldwide Apple Fulfillment Operations and the Business Process Re-engineering team. This role will work Read more
Position Opening at *Apple* - Apple (United...
…customers purchase our products, you're the one who helps them get more out of their new Apple technology. Your day in the Apple Store is filled with a range of Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.