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Sunday, December 16, 2012

WSJ: Apple moving closer to producing a television

Yesterday the Wall Street Journal once again stoked the rumor mill by reporting that Apple is making more moves toward coming out with a TV. According to AppleInsider, the article says that Apple is currently testing several designs for a large-format HDTV in partnership with the Asian manufacturers Foxconn and Sharp. The article does point out that this doesn't necessarily mean that Apple will manufacture a TV. Rather, it indicates just what Tim Cook recently said: the a TV is an "area of intense interest" for Apple. If they do decide to go ahead, they need to test whether their designs will work and whether the manufacturers can efficiently produce them. Any new product entails a lot of prototyping and testing just to make sure it works and can be manufactured with few defects. This is especially the case with Apple's technology, since their innovations, such as the in-cell display on the iPhone 5, tend to challenge the capabilities of the manufacturers.

Frankly, despite my admiration for Apple, I've been having a hard time imagining how they can revolutionize yet another industry. Their rumored offering of a la carte, app-based TV channels is certainly appealing. And their use of Siri and gestures for the interface would be cool. But beyond that, then what?

That question is answered in a fascinating article on the Forbes website, which describes new features that would help the Apple television crush the competition. The author describes how the interactive features of an iTV could make it stand out. Simply put, ads help TV content to be free, and if you have to watch ads, why not make it a better experience by showing you only ads for things you like? The author imagines a "like" button that would let you indicate which ads you like. Eventually, he says, the ads could have as much appeal as the programming itself. Not only could this improve your experience, but it would also have advertisers salivating at having such a targeted audience. 

He also imagines that Apple could integrate FaceTime with an iTV. Sort of seems like a no-brainer. TV wouild immediately become a more social experience. He says you could watch football games with your far-flung buddies, and even share virtual high-fives when your favorite team scores a TD. Imagine how this social experience would change TV. You could converse with someone about a program even as you watch it, with their image appearing in a corner of the screen.

Apple has gotten things right so many times, that consumers are confident that an iTV will deliver a new experience. A survey earlier this week found that 47% of U.S. households are extremely or somewhat interested in an Apple HDTV, with 20% of those surveyed saying they'd be willing to pay a premium to buy a TV from Apple. Those aged 18 to 29 are the most interested, and would be willing to pay 32% premium. What other company in the world has consumers lining up to buy a product that doesn't exist and indicating that they'd pay more for it, even though they have no idea what features it will have?

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