Comments from two sector analysts at research firm Sanford C Bernstein suggest that any Apple TV set product may be more successful in markets outside the US, such as Europe.
In an investor briefing reported on paidcontent.org, senior US media analyst Todd Juenger suggested that Apple was “largely stymied” in the US to do anything truly disruptive in terms of the television ecosystem, with all of the content that people care about most being in the hands of the US media companies, none of whom he said really had any discernible upside to gain from entering into any agreement to make that content available to Apple. Indeed, he suggested they have a lot to lose by doing that. “Apple would need to do that to really disrupt things. What Apple has left to do is to build a device,” he concluded.
According to Juenger, the absent middle ground in the US TV ecosystem – between the expensive multi-channel pay TV most viewers buy and the five-network free TV a minority take – is not about to be occupied any time soon by a cheaper or alternative service offered by the likes of Apple.
Although Juenger has doubts about the prospects in the US, his Bernstein colleague, senior European media analyst Claudio Aspesi, suggests the situation may be more promising for Apple, briefing investors that: “Several players (including new entrants and Telcos) are trying to potentially find a niche and a play; if this process were to lead to a sufficiently fragmented market, it would be easier (relative to the US) for technology companies to find a foothold in content. If the market fragments that much, then, it will be all that much easier for Apple (or Google or Amazon), at some point, to come in and consolidate this.”
Industry watchers have latched onto recent comments from Apple CEO Tim Cook in an interview with NBC’s Brian Williams that: “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years. It’s an area of intense interest. I can’t say more than that.” While some observers see this as a sign of an impending Apple TV set launch, Cook was merely reiterating comments he made at the All Things Digital conference in May 2012.
He said at the time that Apple TV was not a fifth leg of the stool. “It’s not of the same market size of a phone business or the Mac business or the music business or the tablet business. It’s not like that. But last year we sold 2.8 million Apple TVs. This year, in the first six months, we’ve sold 2.7 [million].”
He suggested this was helped by 1080p and movies in the cloud. “And so this is an area of intense interest for us. Many of us, the TV that we do watch is almost exclusively on it. That’s what my TV watching is. All of my movies, everything, is coming through Apple TV,” he stated.
“So the customer satisfaction with that product is incredible. It’s off the charts. So we’re going to keep pulling this string and see where it takes us. I think many people would say, this is an area in their life that they’re not really pleased with,”he suggested.
“The whole TV experience. So it’s an interesting area. We’ll have to see what we do. Right now, our contribution is Apple TV. Here’s the way we’d look at it. Not just at this, but other areas. We’d look and ask, can we control the key technology? Can we make a significant contribution far beyond what others have done in this area? Can we make a product that we all want? We think we’re reasonable proxies for others. So those are things we’d ask about any new product category,” he revealed.
“This is sort of how we think. How we think about it, how we look at it. I love the product, but I think Apple TV is more something that you keep pulling the string to see where it goes,” he concluded.