Is Apple's Rumored Set-Top Box Too Expensive At $199?

Apple Inc. AAPL is rumored to be developing a new set-top box that will retail for as much as $199. The device will presumably carry the Apple TV moniker and come with a host of features not offered with the previous iterations.

"Who needed an iPhone 6? Nobody!" Rentrak Corporation RENT Senior Media Analyst Paul Dergarabedian told Benzinga. "An iPhone 5 was enough. But [consumers] still wanted it. That's the thing -- this is what Apple does."

Dergarabedian said he has the second-generation Apple TV (the first compact "hockey puck" model) and uses it "all the time."

"But when I hear about a new one, I actually want it to be more expensive," he said. "Because in my mind (as a consumer), well gee, it's gotta have a lot more features for twice the price. And I want a new Apple toy and I'm gonna go spend the money. I think a lot of people think like that."

Apps and Siri support are among the rumored features, but none of them appear to be game-changing additions.

"That's the genius of Apple: getting us to buy stuff we don't really need," Dergarabedian added. "But they make it look so cool and it has Siri support. If I can talk to my TV and tell it what to do…if I could say, 'Siri, I want to watch Breaking Bad,' and it would actually take you to the app [that offers that show], that would be really cool. That would be worth it."

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High Price Compared To…

Tigress Financial Partners analyst Ivan Feinseth said the price point sounds low compared to the rumored features.

"However, it sounds high compared to what the Chromecast and a few of the other boxes can do," said Feinseth. "You can get a DVD player with smart features for between $50 and $75. However, Apple is a premium-priced product. I still believe they should be making a television with the smart features."

Feinseth said that Apple will have to make an official announcement (and detail the full list of features) before the rumored price can be justified.

"It would have to have some flash memory," he said. "Hard drives would be no good. Plus the size, it's tiny. Look at the size of it now. They gotta go small. But in my view, unless they make an actual television, they're not gonna really be a serious player in the TV market."

Feinseth believes a TV would "sell well" and that people are "willing to pay up for Apple products."

"They make big monitors for computers," Feinseth added. "A TV is really just a bigger computer monitor. The problem has been the price point. A 46-inch TV is around $500. An Apple version would be $1,000. Could they get it? I believe they could because Apple products are premium priced and they are good quality."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.