Many Apple [stckqut]AAPL[/stckqut] fans, investors, and analysts were surprised when The Wall Street Journal reported Cupertino has shelved its plans to bring a ultra-high definition television set to market over a year ago. According to “people familiar with the matter,” Apple could not differentiate from TV sets on the market enough with compelling, breakthrough features in order to justify its entrance into a competitive market.
Among Apple analysts, the news that Apple shelved its television plans came as a surprise to some and confirmation to others. Count Piper Jaffray’s Apple analyst, Gene Munster, among the surprised, has perhaps been the most vocal about Apple’s TV plans, warning fans that Apple TV was coming to market as early as 2011. In an appearance on CNBC’s “Squawk Alley,” Munster appeared downright solemn with his mea culpa: “This is a tough day for me. It’s a hard reality to accept, and I think that is the reality of it: the TV is on hold.”
Others, myself fortunately included, thought Apple’s plans for a television would not come to fruition for a simple reason: gross margins. Simply put, the television business isn’t as lucrative as Apple desires and it appears Apple could not find enough truly differentiating features to justify higher-cost, premium TV sets. For Apple investors, that’s important insight into this company.
Source: Apple Inc. Isn’t Making a TV Set: Here’s Why It Matters (AAPL)