Apple has two major issues with TV production, Gagnon says.
- TVs aren't replaced often enough for them to be an attractive business for Apple. Until Apple can persuade us to buy new TVs more frequently, the business doesn't seem attractive.
- Apple wants to assure its TV's success by offering compelling content that is better than traditional TV fare. That's way out of Apple's comfort zone. It's taken years for Netflix to achieve the same task, for instance.
According to our Global TV Replacement Study, the average TV replacement cycle is 7-8 years, as opposed to replacement cycle purchases for mobile devices Apple currently sells, which is 2-3 years. In addition, consumers are likely to only purchase one
To offer truly unique product differentiation that would allow Apple to capture market share from existing smart TV brands, they would need to either deliver some exclusive source of content that the other brands cannot, such as a la carte pay-TV channels, or proprietary content not available on other devices. Neither of these is easy to achieve, and our sources indicate this is one of the principle reasons for the delay in the project.