John Paczkowski

Recent Posts by John Paczkowski

Apple Television: A $100 Billion Opportunity

At $328 billion, Apple’s market capitalization is the second largest among U.S. companies. How much higher can it go? Plenty — particularly if the company launches that Internet-connected HDTV it’s rumored to be developing.

UBS analyst Maynard Um says Apple stands to gain an incremental $50 to $100 billion in market capitalization if it pulls off a successful television-set offering — one that inspires the same sort of consumer rabidity as the iPhone and iPad.

But in order to do so, the device must be differentiated enough not just to stand out from the competition, but to shift market value away from it, as the iPhone has from incumbent smartphone manufacturers.

Um believes iTunes will provide that differentiation, but not for some time and not until Apple feels consumers are ready for it.

“We believe Apple will have to build out its own content ecosystem such that a set made by Apple could be differentiated enough from a content perspective to potentially lead to ‘cord-cutting,’” Um says. “However, we do not believe the market is ready for cord-cutting nor do we believe the content is robust or cheap enough.”

But they will be at some point. And when they are, Apple may well be there to meet them with that long-rumored third screen. After all, the opportunity is massive. In-Stat expects the digital TV market in 2011 to hit 144 million units and $76.7 billion in revenue.

[Image credit: Chart by Piper Jaffray]


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work