Will Apple Halt the Sale of Ultra HD Televisions?
While Samsung has become the world leader in sales for the current crop of high-definition televisions, Sony (NYSE: SNE), LG and other corporations are betting heavily on the next generation. Known as Ultra HD TVs, these new sets provide a resolution of 3,840 x 2,160 -- four times that of the current HD resolution (hence original "4K" moniker).
Few consumers will buy a TV that retails for as much as a car. However, the entire HDTV industry started with overinflated prices. Now that that MSRP has dropped to a more reasonable range, many consumers have made the switch. By 2016, Strategy Analytics believes that Ultra HD TVs will have infiltrated 10 million homes.
"Our UHD forecast has been released and we are projecting ten million homes worldwide owning a UHD TV by 2016," Strategy Analytics analyst David Mercer wrote on the company's blog. "We're looking forward to seeing the first wave of these products and some great 4K content next week in Vegas."
Mercer's analysis does not include the possibility that Apple (NASDAQ: AAPL) will release a high-end TV over the next few years. Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research, believes that a Retina Display TV would cost at least $25,000.
To keep the costs down, many analysts believe that Apple will not build a TV with the largest resolution possible. This would be a vastly different strategy from its mobile devices, which are gradually receiving the addition of a Retina Display.
However, Apple's largest devices -- including the iMac and the 27-inch Cinema Display -- are still without the Retina resolution.
Morgan Stanley's Katy Huberty expects Apple to employ a similar strategy when it launches its first television. She estimates that the Mac maker could sell 13 million units at $1,060 each. These sales would occur in America alone; she did not provide any expectations for global sales.
It is not yet known how an Apple-made TV could affect the future of Ultra HD sales. Apple historically builds premium products, so it is difficult to believe that the company will not release a large Retina Display within the next few years. In the meantime, however, anyone who buys a low-res Apple TV set will be less likely to buy a high-res model -- or an Ultra HD TV -- tomorrow. Unlike smartphones, TVs are not throwaway devices.
This could alter the transition that analysts expect to occur as consumers replace and/or upgrade their existing TVs.
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