Monday, August 13, 2012

Pricing Would Determine Customer Interest in an Apple Inc. (NASDAQ:AAPL) TV

Will American consumers queue up to buy the Apple Inc.(NASDAQ:AAPL) TV, when it hits the markets? Would it create the same hysteria that its iPhones and iPads do, every time a new one reaches the store shelves?

Piper Jaffray's Apple expert, Gene Munster believes so. In his latest report to investors, he says that American consumers are generally interested in buying an Apple television set though its pricing would be a big factor in determining its demand.

Apple televisions, of course, would not be the ordinary sets that are being churned out by other makers of consumer electronics. Like all Apple products, it would have new features and provide customers with attributes that they will start to covet only after seeing and experiencing them.

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Steve Jobs had told his biographer Walter Isaacson that he had cracked the code of smart or connected television sets.

According to Munster, about 49 percent of all consumers he surveyed would not mind buying a television from the Apple stable. Close to 30 percent, who were not interested in buying any new television set at all, said that may be persuaded otherwise by an Apple TV in the market.

Based on their experiences with products like the iPhone and iPad, Munster said that his survey showed that "customers would be willing to interrupt an estimated seven-year TV product cycle to purchase an Apple television."

TV sets are not top of the agenda for the Cupertino company, which is now placing all its bets on the soon-to-be launched iPhone 5, and wrest back control of the smartphone segment from Korea's Samsung.

CEO Timothy Cook has been evasive about the launch of the Apple TV and analysts are not expecting anything before 2013 or even 2014.

The only thing which could be a deterrent would be the price according to Munster. Apple products all have premium price tags, as it believes that quality has to come at a price and people would be willing to pay for it.

Analysts have been expecting the TV to retail to $1500 and according to Munster’s survey only about 12 percent of the consumers in his survey were willing to pay that kind of money for a TV set.

Prices of television sets have been dropping and it is a moot point whether customers would like to pay more than $1000 for something as mundane as a television however `smart' it is.

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