Despite utter silence from Apple Inc. on the development of its own television set, speculation is alive and well. Via Barron’s Tech Trader Daily, we see that Brian White of Topeka Capital Markets – the most bullishly enthusiastic analyst following Apple, with a snazzy-looking price target of $1,111 (U.S.) – is arguing that an Apple television could be available for Christmas. Just 186 shopping days left, folks!
According to Mr. White, who gets his information from a Chinese-language website, Apple partner Hon Hai Precision has placed an order for LCD panels, and is expecting the shipment to arrive in the third quarter.
“The online news source believes the order is for the new Apple TV and could be available for the holiday season,” Mr. White said in a note. “In our view, a holiday launch would make for a very merry holiday season for Apple and consumers.”
Presumably, it would mark a decent day for Apple shareholders too – though it’s hard to see much enthusiasm for the stock these days. The shares hit a record high close of $644 in April, and the price is now down about 9 per cent from that level even though the news on Apple has been upbeat. The valuation on the stocks is also no headwind: Based on estimated earnings the shares trade below 11-times earnings, which is awfully low for a company with such strong growth.
There seem to be a few knocks against Apple right now, though. One is its enormous size. Even with the recent decline, Apple has a market capitalization of about $550-billion. If you expect that number to double over the next few years, well, good luck.
The other is cannibalization. The iPhone has rendered the iPod nearly obsolete. The iPad is likely affecting laptop sales. And you have to wonder what an Apple television would do to both iPads and computers.
And finally, there is the issue of the television itself. Apple has enjoyed a stellar track record in recent years for introducing ground-breaking gadgets that can accurately be described as disruptive technology, in that these gadgets have turned business on its head.
But can a television have the same impact? Consumers happily replace gadgets like iPods, iPhones and iPads regularly as new, beefier models hit the market. But a television, it seems to me, has a different background: They tend to stick around, which implies that Apple is going to have a harder time building this aspect of its business into a major revenue-driver. And that’s if a television is indeed in the works.