The Market Is Waiting for Apple’s iTV with Arms Wide Open

Morgan Stanley analyst says the company could sell 13 million units in the US alone

By Filip Truta on December 12th, 2012 09:57 GMT

It’s not a matter of whether Apple will revolutionize the TV industry, but when, according to prominent Wall Street analysts who have long forecasted the release of such a product. A research note from Morgan Stanley’s Katy Huberty reveals that iTV represents a 13-billion opportunity for Apple.

A Morgan Stanley research note sent to clients this week reveals that Apple could be on track to add $4.50 / €3.4 to its EPS (earnings per share) by selling a television product priced around $1,060 (€815).

How did Huberty come to her conclusions? Well, the analyst churned up some interesting results from a September survey of 1,568 U.S. “heads of household.”

11% said they would be “extremely interested” in buying an Apple-branded TV set, which translates into 13 million units for the U.S. That’s just the U.S., mind you.

36% said they would be “somewhat interested,” which adds even more potential buyers. 18% already own a smart TV, while only 13% know their TV is “smart.” This finding further cements beliefs that Apple could take on this market with an easy-to-use interface.

From Huberty’s research note (obtained by Fortune), “46% of respondents were willing to pay over $1,000 for an iTV and 10% were willing to pay over $2,000.”

The average was calculated at $1,060 (€815), which spells a 20% premium over the average selling price of a smart TV – $884 (€670).

Some redundant findings are also noted in the report, such as the fact that existing Apple customers – who own at least one device made by the Cupertino company – are nearly four times more likely to buy the iTV than those who don’t own Apple gear.

Also, only the largest consumers of video over the Internet truly understand the value of such a product. According to Huberty’s survey, respondents aged 18 to 29 said they were willing to pay a 32% premium over their current TV.
Apple television set (concept)
   Apple television set (concept)
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