Apple does not make smart TV is about to enter the "dead end"?

Apple shareholders once predicted that Apple will enter the TV industry, and that by 2016, sales may reach 16 million units and receive US$15 billion in revenue. US technology industry analyst Gene Munster was also in the early years. Forecast, "in the next two to four years," Apple will launch TV. When a large amount of fruit powder looked forward to Apple TV, a bad news came from Apple's headquarters: Apple's smart TV program was rejected by Cook. Although Apple officials did not stand up and said that we do not make smart TVs, but all aspects of information indicate that Apple will not touch the "Apple Smart TV Project" which had been highly hoped by Jobs at least in the short term. What exactly is going on?

Believe that after the people know this news, the most panicking is not the fruit powder, but the domestic TV manufacturers who are full of confidence in smart TV, because they are preparing or have already joined the smart TV industry, and hope that this is a Rejuvenate the golden road of the television industry. Is the future of the global and Chinese television industry only a "dummy"? Or let us change our mind. Is Apple's business ecosystem circled out and can't adapt to the TV industry? Apparently domestic TV manufacturers are more willing to get The answer behind.

Apple's TV project is not just an idea. It was started in the era of Jobs, and Jobs also developed it as a key project. He invested more than tens of millions of dollars in research and development. What is the reason that makes Cook no longer comply with Jobs? The last wish? It should be the iPhone’s position in Apple’s midfield, making Cook make this decision.


Why Apple gave up smart TV

Apple’s shareholder Icahn predicted that Apple will enter the TV industry. In 2016, sales may reach 16 million units and receive US$15 billion in revenue. US technology industry analyst Gene Munster predicted in earlier years. , "In the next two to four years," Apple will launch a TV. When a large amount of fruit powder looked forward to Apple TV, it was reported from Apple’s headquarters that Apple’s smart TV program was rejected by Cook. Although Apple officials did not stand up and said that we do not do smart TV, but at least they have reached an internal consensus, that is, give up the smart TV project. What exactly is going on?

Apple's TV project is not just an idea. It was started in the era of Jobs, and Jobs also developed it as a key project. He invested more than tens of millions of dollars in research and development. What is the reason that makes Cook no longer comply with Jobs? The last wish? It should be the iPhone’s position in Apple’s midfield, making Cook make this decision.

Apple is a world-renowned high-margin company. The entire profits of the global smartphone market are almost swallowed by Apple. Paul Gagnon, an analyst at technology market research firm IHS, points out that the global television is a "notoriously low-margin product," with an average gross margin of 10%, taking into account the net profit of other marketing and R&D expenses. The rate is almost zero (narrowly maintaining break-even). In the high-end TV field, Japanese manufacturers have an advantage, but the TV business has become a huge burden for Japanese electronics companies and has become an important source of losses for companies such as Sharp and Sony. Before Panasonic, Toshiba and other companies have contracted the TV business, Sony's TV business, this year to achieve the first profit in 10 years. In addition, the troubled Sharp company also began to withdraw from the North American TV market.

The above analysts believe that another feature of the TV market is the long product update cycle. A TV can be used for seven or eight years or even ten years after purchase. The user will not replace a new TV within two years because of the added functionality.

Apple's 70% income today comes from smartphones. Such high revenue contribution comes from Apple's annual upgrade of smart phones. While a large number of fruit powder, generally will upgrade or even lining up to buy Apple's newly listed mobile phone in the fall.

Compared to smart phones, ultra-thin notebooks and tablet PCs, the update cycle of television is too long for Apple, which is not conducive to the growth of Apple's business. In the product update cycle on the impact of sales, Apple itself has suffered. According to the latest financial report, iPad sales of Apple’s tablet PCs plunged 23% year-on-year, representing a drop in the number of sunset products. In addition to the big-screen mobile phone erode the tablet PC market, iPad users lack the power to replace old products, leading to iPad sales growth curve and iPhone completely contrary.


If Apple's strong brand power is used, there is no problem for Apple to make money in the TV business. However, such a small profit may not be able to enter Apple's field of vision. Apple's gross margin for 2015 is 40%, which is almost four times the average TV market. Television will drag Apple's ability to make money. Apple generally controls the business ecosystem. In the iOS ecosystem of tablets and mobile phones, Apple also plays a leading role. However, it is difficult for Apple to master the dominant role in television and television.

In the past year, the Internet-based video service and live streaming of television streaming began to rise. According to media reports, Apple is also developing its own TV streaming service (including on-demand and live channels). If Apple's TV tightly bundles its own streaming services, Apple will take the lead. However, as we all know, the vast majority of TV buyers, it is still difficult to give up cable TV, satellite TV, open TV and other service modes. In the TV ecology controlled by TV media companies, it is difficult for Apple to steal its dominant position.

The TV market is highly competitive and the homogeneity of products is serious. According to Apple's style, it must rely on huge innovations, redefining "television sets" and creating an industry subversion. Although Apple had previously applied for some TV technology patents, these technologies are not enough to allow Apple to create a refreshing "new smart TV" product, or to launch a "killer-level features." In addition, Apple Retail is Apple's most important direct sales channel. Smartphones, tablets, and ultra-thin notebooks have made Apple retail stores the highest unit sales revenue record in the retail industry. The huge size of the TV itself will bring no trouble to Apple in terms of retail efficiency and logistics. In view of the various unfavorable factors of the television business, Apple eventually chose the TV set-top box as its main hardware for the home entertainment market.

Where Do Domestic Internet TV Sets Go

Is Apple's termination of the TV project a wake-up call to many domestic Internet TV companies? We do not think so. Smart TVs will definitely have regional attributes in the future. The reason is that content is not a smart TV without content. Therefore, it will be a new test for all TV companies in the future: jump out of hardware to do content and jump out of TV to experience. With smart TV as a platform, instead of simply "seeing and playing," build a family living room ecosystem centered on a large-screen TV. This is not only the life of a traditional TV set, but also a new life for TV. That is through the television platform, providing an integrated and rich experience from seeing to playing and then using.

Although a large number of traditional TV companies currently have not completely found the TV market in the Internet era, the demand for TV viewers has been activated. However, we believe that the door to the future has been opened and the rest is only a matter of time.