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Why I'm Glad Apple Inc. Killed Its Smart TV Plans

May 19, 2015

There's simply no reason for Apple to jump into the crowded low-margin battlefield of smart TVs when it can sell its hardware at gross margins exceeding 40%. Steve Jobs reportedly once told employees, "TV is a terrible business. They don't turn over and the margins suck."

Perhaps Icahn will argue that Apple's brand appeal could convince people to buy $1,500 4K TVs. But in my opinion, TVs don't belong in the same category as smartphones or tablets. Plunging prices across the market indicate that customers favor big screens with low price tags, and the upgrade cycle for TVs is much longer than the one for smartphones and tablets.

In addition, Apple already has a decent foothold in the connected TV market with Apple TV, which accounted for 17% of all streaming media devices in the U.S. last year, according to Parks Associates. That makes it a decent platform for delivering iTunes, its upcoming streaming TV service, and other digital content to customers.

From the article "Why I'm Glad Apple Inc. Killed Its Smart TV Plans" by Leo Sun.

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