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TheStreet Open House

An Apple iTV Would Add Little to Its Stock Value

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Rumors surrounding Apple's (AAPL) foray into the TV market seem to be growing in number every day, with some even claiming that the new iProduct could be arriving as soon as before the end of the year. The most recent one was floated by AppleInsider, which claimed that Apple is seeking to buy German luxury TV maker Loewe but the latter shot down these claims soon after.

While most of these rumors have not been fact-based, Foxconn parent Hon Hai Precision Industry's confirmed decision to invest in LCD display maker Sharp a couple of months back lent some credence to the rumors. (See: Is Apple the Invisible Force Behind the Sharp-Foxconn Deal? )

While there is a lot of speculation surrounding Apple's new iProduct, there have been few attempts so far to seize the opportunity that the TV market presents for Apple.

Unlike smartphones and tablets, two markets that were still very young or even unformed when Apple launched the iPhone and the iPad, the TV market is a huge multi-billion dollar industry that Apple will be trying to penetrate. Still, the general opinion seems to be that the opportunity is there for Apple to enter and disrupt it. However, we believe that the TV market holds very little value for Apple should it launch what is being rumored to be the 'iTV'.

See our complete analysis of Apple here


For our analysis, we have made a few assumptions in order to keep things simple and intuitive. First, that Apple would release the iTV in 2013 in a one-size-fits-all 40-60 inch variant. Apple has historically stuck to this game plan for both the iPhone and the iPad. Therefore, it is reasonable to assume that it would not want to deviate much from that successful strategy.

Our second assumption is that the price of the TV would be in the$1,000 to $2,000 range, consistent with Apple's strategy to bring high-end, premium-priced products to the market. Beyond $2,000 would be making the product too pricey, in our opinion.

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