But after nearly a decade of research, Apple quietly shelved plans to make such a set more than a year ago, according to people familiar with the matter. […] Making a television is a tough sell. It’s a notoriously cutthroat industry that digests and commoditizes new technologies quickly, starting a margin-killing race to lower prices.
I don’t think the generic notion of commoditization is the central issue here. In fact, Apple thrives in three businesses that are already “commoditized”: smartphones, tablets, and computers.
Instead, the central issue is that, in televisions, much of the capability has been unbundled from the display. Who helped lead that trend? Many players, including Apple (Apple TV launched in 2007), Roku, Netflix, Amazon, and Hulu. And, more recently, Google, with Chromecast. But in another, very real, sense it started years ago with the cable companies and the cable box.
At a product level, Apple’s advantage comes from the integration of six elements:
- Content / services
- Apps – third party
- Apps – native
- Operating system
- Computing hardware
- Industrial design
With regard to viewing streamed video (the current and future form of most video) the top five elements now reside (mostly) in the set-top-box (Apple TV) or even in the cloud. It’s in this context that Apple might have struggled to produce a television set that was meaningfully compelling and worth the effort. And it’s also in this context that Apple might, in contrast, grow the sales and profits of the Apple TV box.