Why Apple TV Could be Bigger Than You Think

NEW YORK (TheStreet) - An Apple (AAPL)-branded television set has been rumored seemingly forever, and now analysts are starting to incorporate it into their earnings estimates.

Jefferies analyst Peter Misek raised his Apple price target to $800 per share on Thursday, noting that the tech giant's likely to introduce an Apple TV set in the fourth quarter of this year. Foxconn's recent investment in Sharp is an integral part of getting components for an Apple TV, according to Misek, echoing TheStreet's take on the deal.

"We believe the Hon Hai/Sharp deal is due to Sharp's increasing importance to Apple and iTV," explained Misek, in his research report. "Our recent checks in Asia indicate that specialty components have begun to ship to Apple's Asia panel suppliers with polarized films, filters, and IGZO (Indium Gallium Zinc Oxide) components starting to move in small quantities."

Misek assumes the iPanel, as he's calling the device, will sell for $1,250 and have 30% gross margins, and would allow Apple to sell an additional iPad or iPhone due to the halo effect. He believes as many as 2 million Apple television sets could be sold in the fourth quarter of 2012, and 10 million in calender year 2013. The analyst raised his fiscal year earnings per share estimate to $53.98, well above the $49.20 that Wall Street is expecting.

Other analysts have raised their Apple price targets in recent days, with Topeka Capital's Brian White giving Apple a $1,001 price target, the highest on Wall Street.

Apple CEO Tim Cook has dropped hints about a potential television set, saying "Apple doesn't do hobbies as a general rule," when speaking about Apple's existing set-top box, the Apple TV. He followed that up by saying that the company "always thought there was something there, and that if we kept following our intuition and kept pulling that string, we might find something larger."

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