Did Intel, Samsung Scare Apple Out of the TV Business?

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By Louis Bedigian | February 14, 2013 6:06 AM EST

Not that long ago, Apple (NASDAQ: AAPL [FREE Stock Trend Analysis]) was largely expected to design, manufacture and release a large television set.

Analysts were sure of its existence but argued over the price. One analyst estimated that a 50-inch Retina Display could cost as much as $25,000 -- roughly the same price as a 4K Ultra-HD television set.

Last May, after Foxconn's CEO reportedly confirmed that Apple was developing its first television, the manufacturer sternly denied the report.

Even then, rumors of an Apple TV continued to circulate. It was not enough that Apple had built a successful set-top box -- analysts and consumers were equally convinced that the company would release an actual television set.

Now those rumors have mysteriously disappeared. Media attention has miraculously shifted to the iWatch concept, which has been receiving weekly updates from all the big players, including Bloomberg and The Wall Street Journal. If the reports are accurate, Apple is currently forming a team of more than 100 product designers to build a wearable computer that may or may not be the size of a watch.

How can a watch be more exciting than a television set? Simply put, there has been little to no evidence confirming that Apple intends to build a TV. However, there have been several reports claiming that Apple is already working on the iWatch. Believe it or not, real products are far more exciting than fictional items concocted by overzealous analysts.

That said, Apple co-founder Steve Jobs did tell Walter Isaacson (author of the official Jobs biography) that he had finally cracked the TV code. This indicated that, at one time or other, Apple had fully intended to produce a TV set. (Jobs said this himself: "I'd like to create an integrated television set that is completely easy to use.")

Sixteen months have passed since that quote surfaced, but Apple's TV plans remain a mystery.

It could be that Apple has realized that it is pointless to enter the TV business right now. As a low-margin industry, most TV makers lose money. Television sales picked up briefly when the high-def transition occurred, but that is over now. Most consumers (especially young TV watchers, sports lovers and gamers) have already purchased at least one HDTV. It would be very difficult for Apple to persuade those individuals to go out and buy another set -- particularly one that is likely to sell at a premium.

There could be another reason why Apple has not released a TV, however: new and unexpected competition from the likes of Intel (NASDAQ: INTC) and Samsung. Intel hired talent from Apple, Netflix (NASDAQ: NFLX) and Google (NASDAQ: GOOG) to build a new TV service and an accompanying set-top box. Samsung has heavily invested in a number of Smart TV functions, such as apps, games and motion controls -- all things Apple was expected to bring to the TV industry.

If Apple wants to build a TV that is truly different, it is going to need more than apps and a fresh interface to motivate consumers.

Follow me @LouisBedigianBZ

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