A chicken in every pot and an Apple TV in every living room

editor's corner

Jim O'Neil

iPod. iPhone. iPad. iTV?

Apple (Nasdaq: APPL)'s track record with devices that revolutionize an industry segment makes it a tough company to beat against. With so many rumors swirling around that the company is planning to release its own connected TV this year, it's a good time to look at what that might mean.

Conventional wisdom says an Apple TV will carry a big price tag and that it will likely be a niche product, initially targeting early adopters, Mac fans and affluent consumers. But Apple has played hardball with its Apple TV set-top device, pricing it at $99 and making a killing with it in the past year. Strategy Analytics said the OTT device owns about 32 percent of a very crowded market, and said it expects sales of the device to double in 2012.

The computer maker also brought the iPad to market at a price that consumers have easily swallowed, making it, too, the leader in its market segment--a lead that is expected to continue to grow. And, of course, there doesn't seem to be much erosion in the iPhone's growth, where its become a favorite of a consumer segment vital to the market: young, educated and affluent buyers.

So, why expect anything different from a connected Apple TV?

The connected TV market is expected to boom in 2012. Parks Associates last month said some 20 percent of middle-class households--those with annual incomes of $50,000 to $75,000--plan to buy a smart TV during the closing weeks of 2011, and 12 percent of HHs with income over $75,000 also intend to buy connected TVs.

Is it that much of a reach to expect consumers looking to lay down a chunk of cash on a connected TV to add a couple of hundred more for one with an Apple logo?

Not really.

There have been a few reports out the last couple of weeks that there might be a holdup on Apple's connected TV push, delaying it until 2013, citing sluggish economic conditions. USA Today Tuesday opined that Apple has struggled to make content deals with studios. But it's early in the game, and content owners increasingly are seeing that delivering their programs online is starting to pay off.

Sterne Agee analyst Shaw Wu last month wrote that that Apple apparently has resurrected its efforts to convince studios to allow it to offer their programming à la carte, charging consumers a subscription fee for a customized line up of content.

"This is obviously much more complicated from a licensing standpoint," Wu wrote in a note to investors. "And in our view, would change the game for television and give AAPL a big leg-up against the competition."

Apple originally floated that plan to studios in 2009, offering networks a $30-per-month subscription plan to deliver television content via iTunes. Obviously, Hollywood balked, but just barely. As one Tinseltown exec said at the time: "I think they might get it right this time."

That executive's words may be more prescient in 2012 than they were back then.

Back in the 1928 presidential campaign, Herbert Hoover promised "A chicken in every pot and a car in every garage."

Let's go with "a chicken in every pot and an Apple TV in every living room," this year and see where that goes.

What's an Apple TV launch mean for the industry? For your business? Drop me a note.--Jim

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