We all know that Apple’s HDTV is set to revolutionize the TV industry, but what about the content industry? Would the idea of an Apple TV set with Siri, FaceTime, and Airplay, an iSight Camera, along with the look and feel of an Apple product not be enough for you to want to buy one? I would say yes, as would a few others, I assume. I found myself arguing with a friend about the idea that Apple could not release anything until it got its content partnerships worked out. I, personally, could not disagree more. I would think Apple would be prone to releasing a fantastic television set that revolutionizes the TV hardware/software industry and not even worry about the content right away.

Like everything else they do, they could simply release a product and let the market evolve around them. Let the products popularity drive content agreements, not wait for the market to move first and then release the product! Remember, they can always allow a coax cable to run into the back and immediately have all the content most people are use to.

Well, needless to say, my friend called me crazy. Thankfully, not 24 hours later an article came across my desk regarding Apple analyst Gene Munster of Piper Jaffary via the great folks over at Business Insider. It would appear that Munster, who has some knowledge in this field, says it is a simple question of “when”, not “if” this product will be released:

While many believe content will be the key differentiator for the Apple television, we expect at launch Apple may not necessarily revolutionize the content industry. Ultimately we believe that consumers and Apple want unbundled channels and more options including time shifting to watch content, but note that content owners are hesitant to change. Our take is consumers are willing to pay more for each channel as long as their overall bill goes down (i.e. pay more for fewer channels you actually want). The bottom line is that we believe in five years Apple will have a significant hand in changing how people consume content on their TV. We know the end point, unbundled channels and DVR in the cloud. However this will take time (3-5 years.), and while we believe Apple will innovate on its existing TV content offering at the launch of Apple Television, we caution that the initial offering may more closely resemble the current Apple TV content offering (Netflix, iTunes, and eventually Hulu). As mentioned, we expect at launch the interface will allow users a new way to search, interact and record cable content, which will likely give users the feeling of an improved content offering.

Gene Munster goes on to break down what he thinks Apple will do to make this product special:

“Interface. We expect the TV to include Siri and compatibility with third party devices as well as potential integration with content guides, offering consumers improved control which should lead to greater value from their monthly cable subscription. We note that cable companies could charge a fee for consumers to use Apple Televisions ($5-10/month similar to cable box rental fees). Some investors do not believe Apple will be able to gain control of cable interfaces due to advertising on the interface, but we note that the ads are typically house ads and are not significant revenue contributors.

Apps/Games. We expect Apple to ultimately enable the App Store so consumers can play games, listen to music, etc. on their Apple Television set. We believe gaming will be of particular interest given the large base of iOS game developers. We believe games could be controlled by voice, iPhone/iPad and eventually motion capture built into the display,

Design. We believe the Apple television will include many existing Apple styling cues including aluminum casing and reduction of wires. We expect the design of the TV to make it the stand-out center piece of the consumer’s living room. We expect the TV to be LCD given the high cost of OLED panels.

Finally, our friendly analyst gives his take on the specs (sizes and prices) we should expect to see when the Apple HDTV finally arrives:

We believe an Apple television could cost between $1500-2000 and is likely to be available in larger screen sizes (42-55″). The reason we are comfortable with that range is based on our thoughts of what an average Internet connected TV set up consists of (50″ Internet connected HDTV, game system, Blu Ray player, cable box, universal remote). We believe a set-up as outlined would cost around $1,650 (TV $1,200, game system $200, Blu Ray $150, universal remote $100). We note that the iPhone  typically carries about a 20% premium to other high- end smartphones, thus a 20% premium to the $1,650 set-up above would suggest a ~$2,000 TV.

So, when will we see this Apple TV set? According to Gene Munster we should expect the release to come somewhere around the first half of 2013.

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Apple will release its own branded TV by the end of the year, according to Canaccord Genuity analyst Michael Walkley, quoted by The Mac Observer. In a note to clients, Walkley wrote:

Following our supply chain checks, we have increased confidence Apple will launch a 50-plus inch LCD-TV product by [the first fiscal quarter of 2013].

Walkley also expects the LTE iPhone 5 to be released in the December quarter of 2012.

In a recent interview on Bloomberg Radio, Apple analyst Gene Munster assured that the Apple television is real („we met with some component suppliers at CES“) and said that he thinks Apple TV set „is going to be the biggest thing in consumer electronics since the smartphone came up.“  He was betting that it will be announced later this year, probably for the holiday season.

Back in January Globe and Mail reported that Canada’s largest telecommunications companies – Rogers and Bell – were in talks with Apple to become Canadian launch partners for its Apple HDTV. Another source said Rogers and Bell already had the product in their labs.

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Have you missed Gene Munster and his Apple TV-related “predictions” yet? Piper Jaffray analyst wrote a new note to clients claiming he has heard from “a major TV component supplier” that they had been contacted by Apple regarding “various capabilities of their television display components.” Munster sees this as “continued evidence that Apple is exploring production of a television.” Munster added that Apple had a series of meetings in January 2011 in Asia because the company “was investing in manufacturing facilities for LCD displays ranging from 3.5″ mobile displays to 50″ television displays.”

“In Sept-11 we met with a contact close to an Asian supplier who indicated that prototypes of an Apple Television are in the works,” Munster wrote.

Munster believes the hardware part could be ready for late 2012 lunch, but the content part – getting Hollywood on board – seems to still be a major problem. “The timeline and scope of a revamped content solution is more uncertain,” Piper Jaffray analyst wrote. “Without a revamped TV content solution, we do not think Apple enters the TV market,” he concluded.

Munster offers three scenarios on how might a revamped TV content solution look like (quotation from Munster’s note):

1. Apple could simply enable its television to manage a consumer’s live TV service from within a unified interface much like TiVo does, partnering with MSOs [i.e. the cable companies]. As Apple was developing the iPhone many investors expected the company to become an MVNO (Mobile Virtual Network Operator). Instead, the company partnered with AT&T (then Cingular) to bring the iPhone to market in the U.S. Similarly, Apple could choose to avoid the cost and effort of entering the live TV services business and simply partner with MSOs to deliver live, cable TV to the Apple Television. While this would be the easiest and most likely option, it would also be the least revolutionary. Technically, this option would function much like TiVo does today: partnering with MSOs and offering a unified DVR/guidance software interface to make search and discovery easier for the viewer. In some ways, a connected TV’s software is the biggest differentiator that Apple can bring to the table, so this option could still result in a new and fresh product for the television market. Apple could also supplement this with its iTunes Movie rental and purchase service directly on the television.

    2. Apple could offer access to live TV from network channels in combination with other web-based video services. One middle-of-the-road option could be for Apple to deliver live TV from network channels (either over the internet or over the air) to the Apple Television. Apple could then leverage a new App Store for the Apple Television to supplement the basic live TV features with Netflix, Hulu Plus, or any content provider that chooses to build an app for the television. In this instance, Apple would also likely continue to offer its iTunes movie and TV content through the iTunes store to the Apple Television.

    3. Apple could offer monthly subscriptions, on an a-la-carte basis, for live TV packages with content from content providers. Clearly the most challenging option, if Apple truly wanted to control the entire television experience – which, again, the company chose not to do when entering the smartphone market – it would have to become a virtual MSO (Multiple Services Provider) and offer monthly subscriptions for live TV services. Such an offering would be unlikely given existing licensing arrangements between content providers and service providers as well as the fact that it lies outside of Apple’s core competencies, even in media. That said, it would enable the company to control the entire experience and possibly deliver new features that are currently unavailable through existing television service providers and CE device makers.

[via Fortune; image by Guilherme M. Schasiepen]

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Do you want to feel like a wizard? Check the Kymera wand in Amazon: You can control your Apple TV waving a wand!