Apple TV to Cost $10,000?

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What will you get from Apple's most expensive television?
There has been a lot of discussion surrounding just how much consumers will have to spend to take home a brand-new, ultra-sleek, extra-shiny Apple
AAPL
television set. Some say that Apple will not price itself outside of the mainstream TV market. Others insist that Apple will market its TV sets as it does any other product and charge a premium, providing the Mac maker with a great profit opportunity. Tablets and MP3 players aside, Apple is known as a “premium” manufacturer. You will spend more on a basic MacBook than any other laptop available. It may last longer. It may have superior battery life, a better-looking screen, and a more comfortable keyboard. It may also be more durable and withstand the kinds of bumps and bruises that would send a Hewlett-Packard
HPQ
machine to its grave. But the price difference is still quite significant: Windows users will often pay $700 to $900 for a decent machine, whereas Mac users will pay upwards of $1,200. By now, most consumers have come to accept the price difference and decided to either become a Mac owner or stick with Windows. But when you consider the additional years of functionality that a Mac could provide (in the past, most Windows laptops were junk after three years; most MacBooks lasted four or five years), the added expense is justifiable. The cost of a new Mac monitor, however, has been a little harder for consumers to swallow. At $999 for a 27-inch Thunderbolt Display, consumers are being asked to spend an awful lot of money for something that is only comparable – not better – to what the competition offered. Unlike an iMac, which is a considerably better desktop than anything Dell
DELL
manufactures, Apple's monitors are not the best in their class. They are very good, for certain. Having used them with Final Cut Pro (the old, outstanding Final Cut Pro – not the damaged replacement from the App Store), I would recommend Apple-made monitors to anyone who is willing to spend the extra coin. I'd also recommend them to anyone looking for a more environmentally friendly solution, since Apple has historically built its monitors with mercury-free bulbs. (Most other laptops, computer monitors and high-def TVs are brightened with bulbs that contain mercury, hence the warning on the box about proper disposal according to state law.) Apple charges $999 for its monitors not because it has to, but because it can. It knows that the Mac-buying community is used to spending more, so the company assumes that consumers will cave and cough up the extra dough. In my experience, however, most consumers would rather save their money for other Apple devices (iPads, iPhones, iPods, etc.) and get a cheaper third-party monitor instead. Regardless, Apple has yet to cave and lower the price of its monitors. In fact, the company still charges $999 for the
two-year-old Cinema Display
. This (along with Apple's overall pricing model) has made many analysts wonder just how much the company will charge for its smallest TV. A recent rumor suggests that Apple is considering a $1,500 price point, presumably for a 42-inch set. From a competitive standpoint, that almost makes sense. Consumers can buy a gorgeous 42-inch TV from Samsung or Sony
SNE
for $900 to $1,100. By charging $400 to $600 more, Apple could maintain its “premium” status without going overboard. Many consumers could swallow $1,500, especially if Apple's TV comes with a few special features that can't be found anywhere else (such as cool/innovative apps, a groundbreaking touch screen, or a cable TV service that lets you pay for channels individually). To stay competitive, Apple can't afford to charge any more for its base model. But how large will Apple TVs get, and how high will the price tags go? Last fall, Trip Chowdhry (the Managing Director of Equity Research at Global Equities Research) told Benzinga that he expects Apple to
charge as much as $4,000
for its most expensive television. Chowdhry compared Apple's strategy to that of Bose, which currently manufactures a $5,000 TV with built-in surround sound speakers. He believes that Apple will add value to its more expensive TV sets by including a similar surround sound feature. That sounds like a decent plan. But there's one catch: the Bose TV comes in just one size – 46 inches. This either means that the built-in surround sound (which is reportedly as breathtaking as any other Bose product) is either very expensive to manufacture, or Bose felt it could charge more because it – like Apple – is a premium manufacturer. Either way, the price is exorbitantly high. And unlike Apple's (presumed) TV, Bose's set does not come with apps, a touch screen, voice activation, or a new way to pay for cable. If Apple's TV includes all of those features, one would imagine that a 60-inch model could retail for a bit more than $5,000. In fact, Samsung – the world's current leader in TV sales – has already surpassed that price point. The company's largest model available is the 65-inch D8000 Series Smart TV; it retails for $5,399. When Samsung refreshes its Smart TV lineup later this year, the company will offer models
as large as 75 inches
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. Going forward, Samsung Smart TVs will come with
apps, touch screen controls, voice activation
, a plethora of other new Apple-sounding features, and one potent exclusive:
Angry Birds
. Samsung has yet to announce the pricing structure of its new Smart TVs. But you can bet that the 75-inch model will retail for quite a bit more than $5,399. When you add all of these things together, it does not seem all that foolish to think that Apple could release a new TV that hits that $10,000 mark. Granted, this set would be designed for Apple's wealthiest customers. It would contain the best features, and likely offer a screen that dwarfed the size of most of its competitors. Apple's screen may also prove to be the most beautiful on the market. While many critics argue that Apple is not the screen leader on desktop and laptop computers, there's no denying that the iPhone has the most beautiful screen of any smartphone. The iPad has the most beautiful screen of any tablet. And the iPod Touch has the most beautiful screen of any MP3 player. Now imagine if Apple applied that technology to its TVs and made a 100-inch high-def Retina Display. Consumers (
wealthy
consumers) would go crazy for that.
Follow me @LouisBedigian
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Posted In: NewsRumorsTechAppleApple TelevisionApple TVCinema DisplayGlobal Equities ResearchiPadiPhoneiPod TouchSamsungSamsung Smart TVSmart TVThunderbolt DisplayTrip Chowdhry
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