There have been predictions about an Apple television set so often and for so long that it has become a sort of running gag among Apple watchers, but a new report from The Wall Street Journal has poured yet more cold water on those forecasts. The typical "people familiar with the matter" tell the WSJ that Apple had "a small team" working on a TV set for a few years, but that the team had been disbanded and its members reassigned to other projects "more than a year ago."
The main problem, according to the report, was a lack of innovative features that would distinguish an Apple TV set from its competitors. The team experimented with "ultra-high-definition" displays, TVs that looked like clear panes of glass when turned off, and FaceTime cameras that could reposition themselves to focus on whoever was currently speaking. None of these were deemed good enough to sell the idea of a television set.
Of course, Apple still has plans for your TV, even if it won't sell you the screen itself. In March, Apple dropped the price of the existing three-year-old Apple TV box from $99 to $69. At the same event, Apple and HBO announced the standalone HBO Now service and app, a semi-exclusive deal that demonstrated Apple's ability to work with content providers.
Other rumors suggest that Apple will use WWDC to announce new Apple TV hardware along with an app store and SDK, which would be a major change from the current system in which only content providers working directly with Apple can add new channels to the Apple TV. The WSJ also reports that Apple is planning to launch a live TV service in the fall with around 25 channels for about $30 to $40 per month.
Though some (including activist investor Carl Icahn, who factors heavily into the WSJ's report) are still pushing for Apple to jump into the TV set market, it seems like a poor fit for the company. Apple's current product lines—especially the iPhone, iPad, and iPod, though it's too early to say about the Apple Watch—succeeded in part because they established new markets by transforming niche gadgets into mainstream consumer electronics.
The market for TV sets, on the other hand, is firmly established. It is both extremely competitive and relatively low-margin, a fact acknowledged by former CEO Steve Jobs. It's possible that, as with the Mac, Apple could carve out a small but profitable niche for itself that defies the trends affecting the rest of the market, but without sufficiently compelling features it would be a tough sell.
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