The last two Consumer
Electronics Shows were overshadowed by Apple AAPL +1.02% — first in 2010 by rumors of a tablet and then in
2011 by the iPad’s stunning success. Indeed January 2011 brought a slew of iPad
wanna-bes, many of which have become road kill, as we predicted. The CES shows
in 2008 and 2009 were impacted by the 2007 launch of Apple’s first iPhone.
This year, as the sprawling show floor
officially opens in Las Vegas today, should be no different. Except that this
time around, the specter of Apple and its rumored plans will torment the core
of CES: the television business, ripe for the picking with a growing number of
customers fed up with costly cable service and the lack of innovation in TVs.
“Apple is a very prominent non-participant at CES, within the
TV industry and elsewhere in the consumer electronics industry,” said Paul
Gagnon, director of North American TV research at NPD DisplaySearch
The Cupertino, Calif. company has not made any
announcements in TV beyond its Apple TV set-top box, which former CEO Steve
Jobs once called a “hobby.” But before his death in October 2011, Jobs told his
biographer Walter Isaacson that he had “finally cracked” TV with the “simplest
user interface,” that would synch with all your devices and get rid of the
complex remote controls now used for DVD players and cable.
“Apple is going to do something at some
point,” said Shaw Wu, a Sterne Agee analyst. “It’s a question of timing.”
The
television market is clearly in the cross hairs.
Consumers are frustrated with high costs for cable services, including paying
for hundreds of channels they never watch and systems with antiquated or
bizarre navigation tools. There’s also a high saturation point of consumers who
have already purchased a big-screen HDTV.
Google Inc. GOOG +0.95% is providing one effort with its Android based
software that integrates streaming Web content with standard TV fare.
But its first
generation of Google TV, unrolled in 2010, was underwhelming. At CES, some TV
makers are showing Google TV built into new sets with the latest second
generation software by the Internet search giant.
“This year the TV industry had kind of muddled
through,” said Gagnon. “2011 was not a strong growth year for the TV industry.
A lot of people own them and TV makers are trying to find something to excite
consumers to get them to trade up.”
So now, consumers who
don’t need to upgrade their TV set for awhile, want smarter, more navigable, and less costly viewing.
The instances of cord cutting — those who are getting rid of their cable
service — is creeping upwards, as more consumers are watching network TV shows
or movies streamed over the Internet, cancelling cable and the hundreds of channels
they never watch.
A study by Deloitte earlier this week of
U.S.consumers reported that 9% of respondents had canceled cable subscriptions,
and another 11% said they were considering it. Viewers are also watching TV
shows and even movies on other devices, including tablets and smartphones.
“Apple could totally change the game,” Wu
said. “The content is what’s holding it up. It’s tough to predict. The most important trend is cord
cutting.” Wu noted it is still a nascent trend and that cable companies
and broadcasters still hold the cards with their content. “But if that
continues, and the content guys are losing business, they may be forced to
explore with Apple where they have to change their business model.”
Some speculation around Apple TV includes
theories that Apple may even be developing its own TV, and thus would control
the whole ecosystem, much as it does with the iPhone, the iPad, the iPod, and
the Mac.
Credit -Therese Poletti
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