Apple will make very little money from taking on the TV market, according to analysis.
The
Street bases its analysis on a number of assumptions. It
presumes that Apple will want to make a healthy
gross margin of 35% at
least; it also assumes Apple will grow its TV market share from around
0% in 2012 to about 7% in 2018; and that the television will be priced
around $1,000 to $2,000.
The report notes that, according to NDP DisplaySearch, TV sales have
stagnated at around 250 million units for the past two years. Sales are
expected to see a slow pace of growth in the coming years.
The LCD segment of the market is seeing healthy growth, with the
premium LED segment of the LCD market seeing even faster
growth, notes
the report. We see TV sales growing to around 285 million by the end of
our forecast period.
Based on comparisons with Apple's successful onslaught of the mobile
phone market, The Street assumes that the Apple iTV will see "about the
same market share growth trajectory as the iPhone." On this basis, the
report predicts: "This shows that Apple will have close to 20 million
iTV sales in 2018."
The Street calculates a price estimate of $740 a share for Apple based
on 20 million Apple TV sales by the end of the forecast period, with
the price declining from $1,500 in 2013 to $1,300 in 2018, and gross
margins of 35% down to 30% by 2018.
This is "growth of less than 6% over the current $700 price estimate,"
notes the report.
"This goes to show that for all those who seem to believe that the iTV
will be Apple's next big thing in the market, the iTV doesn't seem to
add much value to Apple's stock," states the report.
This article comes from:http://www.itbusiness.ca/it/client/en/home/News.asp?id=67568
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