Apple Testing TV Designs with Asian Suppliers

Last week, Apple CEO Tim Cook told NBC that Apple TV has become more than a hobby of the Cupertino company. With investors questioning Apple's strategy for long term growth beyond the iPhone and iPad, the prospect of an expanded Apple TV could be taking shape as the company is now testing designs for large-screen high resolution TVs. 

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According to a report from The Wall Street Journal, Apple is collaborating with Asian component suppliers Hon Hai Precision Industry Co. and Sharp Corp., who together own and operate an LCD factory in Sakai, Japan. Hon Hai, which already assembles Apple's iPhone and iPad, has been working with Sharp to manufacture LCD panels that can be used for any television. The company has already begun assembling 60-inch televisions for Visio, Inc. using panels from the Sakai plant. 

There remain many obstacles to Apple TV offering a comprehensive service with a full slate of channels, both from cable operators and content providers, however television is a space that could go a long way toward neutralizing competition with rivals Samsung and Google.  

In a separate report, Google chairman Eric Schmidt told Bloomberg that the company is winning the mobile war with Apple. While Apple generates more revenue per unit on its high-end products, the rapid growth of Google's Android OS in 2012 cannot be seen as anything other than a serious challenge to Apple's long term business profile. 

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“This is a huge platform change; this is of the scale of 20 years ago -- Microsoft versus Apple,” Schmidt told Bloomberg. “We’re winning that war pretty clearly now.”

If this is indeed the case, now would seem the perfect time for Apple to forge a more prominent stake and identity in television. The company is known, and likely feared, for its innovative and market disrupting products. While the existing model for television is liable to resist or charge high for Apple's further entry into the industry, both Tim Cook's comments and the profile of Apple's rivals suggest television could be the company's next best frontier. 

According to the WSJ, sales of Apple's current $99 set-top box, which offers some Internet video and apps via deals with Netflix and Hulu, have been increasing but are still minimal. 

With vast opportunities presented by the growth of entertainment on the web and new avenues for content delivery, Tim Cook's comment that television today is going backwards in time may not be far off the mark. The question is whether Apple can take an active role in moulding TV's future before the industry and its rivals catch up.