Apple TV: Content, Sales Volume, Uniqueness are Key Challenges

Some observers argue Apple needs to launch a TV device (a display) to spur growth. Others might argue that is a mistake. 

Some might argue that the "device" isn't so important as the content

To be sure, "Apple TV" already offers a way to watch Internet content on a standard TV display. 

Whether the next "breakthrough" product is an actual television, a watch or something else, it is clear enough that Apple certainly will have to create another major product category beyond the iPad. 

Product ImageBut some would argue that Apple TV (a display) cannot be that product. 

For starters, the average TV replacement cycle is seven years to eight years, where mobile device replacement cycles are two to three years.

Would Apple be willing to be the next category on replacement rates that long? Beyond that, some would argue the display itself is not the opportunity, but the content offer. 

Up to this point, though, nobody has been able to convince the leading content suppliers to license their content in ways that would allow Apple to create uniqueness and value by unbundling content availability.

In other words, what would make Apple TV immediately different is ability to buy content show by show, a single series or a single channel. But Apple would be unlikely to get such exclusive rights. 

For such reasons, some observers do not think an Apple TV (a display) will be the next Apple breakthrough product. Nor, in all likelihood, will the "Apple TV" decoder be such a product, until the device enables unique or at least radically different ways to buy content. 

To be sure, Apple for some time has used content to drive hardware sales. In some ways, a ne product category built on displays would have to invert the process. 

For any Apple TV display, or even the current "Apple TV" decoder, to massively create a new market, the hardware would have to enable radically-different ways to buy content. 

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