“During our China-Taiwan Tech Tour, our research indicates that a full blown Apple ‘iTV’ will launch in 2013, opening up a new market opportunity for the Company,” stated Topeka Capital analyst Brian White succinctly in a research note sent to Wall St. Cheat Sheet on Wednesday.
His main argument hinges on the assertion that the new device will be “different than you think.”
The primary reason for what he termed the “misguided speculation” that has surrounded the timing of the device’s release is due to the fact that Apple (NASDAQ:AAPL) has created entirely new user interface aesthetics, he wrote, noting that these changes are a major innovation capable of revolutionizing the television watching experience. He even noted that the iTV “ecosystem represents a major innovation for the $100 billion LCD TV” as well.
If that proves to be the case, the iPhone maker will be able to silence the criticism — which has fallen fast and furious on the company recently — claiming that Apple has lost its innovative touch. While it has long been seen as a company capable of creating one category-defining product after another — and in fact, Apple build its reputation on that type of creativity — analysts have put forward the thesis that founder Steve Jobs’ absence can be seen in the company’s product pipeline, which, according to their assessments is populated by nothing but product refreshes. Many analysts have cited this change as a reason for the stock’s poor performance as of late…
Even the fact that White made this assertion bodes well for Apple as it is a sign that the company may just have that innovative new product in its pipeline that investors, analysts, and consumers want.
In comparison to his dry introduction, White put forward a very detailed picture of what Apple’s innovative new television will look like. “We believe the ‘iTV’ will be 60-inches in size,” he began, but the device “could also include 50-55 inch options.” More interesting the brokerage firm postulated that the television will be complemented with a miniature device called “iRing” — which will be placed on a user’s finger and act as a motion-detecting remote — and a “mini iTV” screen.
The mini version of the larger device, sized at approximately 9.7 inches, will “seamlessly allow users to view content” in other rooms as it will be able to capture content from the 60-inch iTV across a distance of up to 200 meters (or approximately 656 feet). This feature will open up “use cases around home security, phone calls, video conferencing and other areas,” he wrote, adding that “as part of this experience, Siri and FaceTime will be important.” Such a device could be termed an iPad replacement, but White believes that, while its size will allow for some manufacturing efficiencies, the “mini iTV” will feature much more basic capabilities…
Apple will likely include one mini iTV per television ecosystem, for which customers will pay approximately $1,500, according to the Topeka analyst. However package options will include up to four screens, with pricing based on the number of screens included.
Surprisingly, Apple’s other rumored new device, the “iWatch,” is expected to feature into the packages as well. The smartwatch will be an important part of the “iTV” ecosystem, acting as a mobile accompaniment to the television system. “The interaction between “iTV” and making phone calls will be an important feature of this experience, while the “iWatch” and “iRing” will provide increased mobility around the home, supplanting the need to carry a smartphone around the house,” wrote White.
Included at the bottom of the analyst’s note was a reiteration of the firm’s Buy rating on Apple’s shares and its 12-month price target of $888.00 — a figure based on a price to earnings ratio of 15 times Topeka’s earnings per share estimate for the 2013 calendar year. In comparison, the average target held by the 46 analysts covering the company is $617.63.
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