It has been rumored for months that Apple could reveal a new iTV in mid 2014 but it seems like this is unlikely to happen. A report by DisplaySearchBlog claims that Apple has put its iTV project on hold because it wants to focus more on wearable technology (Like the rumored iWatch) and because there are still several huge problems with a release of the iTV.
For Apple to have a successful television product for the living room, it needs to achieve three goals:
1. Sell enough units to generate sufficient content purchasing points, especially among households who do not yet own Apple TV set-top boxes.
2. Offer a unique point of differentiation to capture market share from leading TV manufacturers such as Samsung and Vizio, while at the same time being able to sell the products for a high enough price to deliver typically high Apple margins.
3. Create follow-on replacement purchases to keep hardware sales from flat-lining once household penetration peaks.
Apple has used the iPod to promote its music service iTunes, this worked out well because Apple sold millions and millions of iPods and because the only software that allowed you to put songs on them was iTunes. Apple is most likely going to use a similar method with its iTV, trying to promote content through its TV, but how big is the chance it will generate sufficient content purchasing points? This is currently one of the main reasons the project is delayed, it also has to compete with services that users are already familiar with like Netflix and Hulu which offer content for a price Apple can’t compete with and can be streamed to your television with the Chromecast or Apple TV.
Another huge issue is the average replacement rate of a television, studies have shown that you might buy a new TV every 7 to 8 years while a smartphone usually doesn’t last more then 2 years. Apple makes huge advantage of this releasing every year a new smartphone, but is this a model it will be able to use with televisions?