Content - An Apple television would present some cool options for new apps and games, but the lean back experience would be no different than with a current TV. People want their Madmen, football, Nascar, Walking Dead, etc. and you will need to buy that through cable companies (for now). If Apple makes a TV it will look awesome and have some neat tricks, but it will be a "Dumb Screen" for whatever comes through the set top box. That seems like a losing solution for Apple.
I think a more likely scenario is that Apple buys a Cable provider like Comcast and replaces the horrible set top box with an Apple version. Why?
Apple's huge cash position - Apple has more than $50B in free cash and are adding ~$10B a quarter. They have made repeated statements about keeping that money available for one or more major strategic investments. They could conceivably have enough money to buy Comcast by the end of this year.
Why this works:
- Fits their vertically integrated model perfectly. Now Apple will own the customer experience from end to end.
- Creates a wedge that will force other carriers to offer an Apple set top box.
- Forces all the content providers to play ball with Apple. If Apple owns the pipes the content co's will lose a lot of negotiating power.
- It is a great high margin business, well suited to the Tim Cook era where device innovation might be slower.
- It is a hedge against Net Neutrality. If the cable co's get their way it could negatively impact the Apple UX, especially for iPad.
In this scenario Apple can take on a high margin business with a host of barriers to entry and milk it while they reimagine what the TV experience should be for the next 20 years. I have no doubt that we will see a beautiful aluminum TV made by Apple at some point, but if they don't figure out the infrastructure foundation first it will not work.