Consumer Electronics

Apple May Enter Market It Did Not Pioneer -- TV

In all the markets in which Apple Inc. (NASDAQ: AAPL) has had success, the consumer electronics company has been a pioneer. If it moves into the television industry, it will lack that critical advantage, which may be a barrier it cannot overcome.

A look at the history of Apple product launches makes the point that, even if Apple manufactures and markets the best products in a sector, it additionally has the “first mover” advantage, to use an overused Harvard Business School term.

The Mac was first sold in 1984 under the name Macintosh. That put its computer in the market at the beginning of the PC age.

The iPod, which was first released in 2001, was an early version of portable multimedia players. And Apple built a huge library of music tethered to the device, a service not available from its competitors. iTunes became an immediate advantage for consumer marketing, and to some extent for the music industry that needed new avenues for distribution.

The iPhone, released in 2007, was among the first smartphones aimed at the consumer market. The Research In Motion Ltd. (NASDAQ: RIMM) BlackBerry had a large customer base, almost exclusively among business and enterprise users. Consumers were not targets of new smartphone devices until the middle of the past decade.

And the iPad was one of the first tablet PCs. Other companies, including Inc. (NASDAQ: AMZN) and Samsung, have launched products to compete with the iPad, but none of them has taken large market share, yet.

The television obviously has been at the center of the living room for decades. The set-top box was the original in-home device to allow for cable TV. Beginning with TiVo Inc. (NASDAQ: TIVO) products, the consumer could watch shows during times other than when they were broadcast. Netflix Inc. (NASDAQ: NFLX) allowed consumers to stream programs onto their televisions via an Internet connection.

The Wall Street Journal reports that:

Apple Inc. is working with component suppliers in Asia to test several TV-set designs, people familiar with the situation said, suggesting the U.S. company is moving closer to expanding its offerings for the living room.

Apple’s powerful brand may help the firm to elbow its way into the living room. However, Americans already have televisions with massive screens, sophisticated audio and boxes for satellites, cable TV and even the current version of Apple TV piled high next to those screens to allow for access to a nearly infinite body of programs.

Apple will be late to the TV market. That creates a barrier the company is not used to and a situation in which it has to gain on the competition from behind.

Douglas A. McIntyre

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