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How Much Would You Pay for an Apple TV?

This article is more than 10 years old.

We know we pay a premium for Apple products. We pay that premium for reliability, for style, and because there is a small glowing

Image via CrunchBase

piece of fruit on the back. Most of all, customers with other Apple products will pay that premium because they already know they like Apple products.

TV has been a subject of speculation for Apple watchers for years. Tim Cook stoked the fires again the other day, re-iterating a previous claim that TV was an area of “intense interest for the company.” The blogosphere went wild. But what would an Apple TV actually mean for the company? A note from Morgan Stanley analyst Katy Huberty, reported by CNET, said that a survey showed that consumers would shell out 20 percent more for an Apple TV, and that there was even more initial interest than for the company’s mobile devices.

Huberty guessed that around 13 million units at $1,060 average would translate to $13 billion in revenue. What isn’t clear is how the margins for television manufacturing compare to mobile devices, but the survey showed that the halo effect from already owning Apple devices would be a powerful force driving people to an Apple TV.

This would be for a full on Apple TV, rather than a set-top box. Self-contained devices have always been the company’s signature. I’m not sure I would pay that much money for an Apple TV – I run my entertainment through my Xbox, and it does just about everything I want it to. If this theoretical Apple TV has something to say about games, however, this may just be the way that the Cupertino company decides to enter the console space. Games have proven a powerful force in both the iPhone and iPad ecosystem, and I think Apple knows just what quality entertainment is capable of.

It’s all academic, of course, if Apple can’t get the content side of the TV business in order. This may be the company that stepped in and reshuffled the very basic facts of the music industry, but the music industry was crippled and desperate at the time. TV and Cable are doing just fine, thank you very much. An Apple TV will only be worthwhile if it has Apple-style software and content distribution, and Apple can’t do that on its own.