Bad Apple Rumor: Smart TV Incoming

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Throw this Apple rumor in the crazy pile: The company is reportedly working on a prototype television that does it all, from movies and games to DVR, apps and Facetime.

This is according to Morgan Stanley analyst Katy Huberty, who bases her information on “checks in Asia.” If true, Huberty expects that Apple could make $4 billion for every 1 percent of the TV market it gets.

Color me skeptical. Just the other day, I wrote about Apple’s rumored plans to bring Airplay video access to televisions. This would allow iPad and iPhone users to stream video from their mobile devices on the big screen. But the whole reason that story makes sense, as Bloomberg reported, is because Apple sees the television hardware market as too risky. The profit margins are slim, and prices are always falling. Apple products, by contrast, are high-profit, and prices rarely drop. Better to leave the hardware to other companies and make money on the software side.

As I wrote on Wednesday, it seems obvious that Apple isn’t finished chipping away at the home entertainment business. Apple TV probably won’t be the company’s final attempt at a living room coup. But if I had to choose one rumor, either the Smart TV or a more software-centric approach, I’d go with the latter.