Apple TV Rumors Run Rampant: Should Investors Care?

It pretty much all began when Tim Cook said this to Brian Williams on NBC’s Rock Center: “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years. It’s an area of intense interest. I can’t say more than that.”

Cook may be silent on the issue for now, but Apple heads and haters haven’t. As they always do when people suspect that one of the world’s most innovative companies is up to something, rumors have circulated, speculation has grown, and investors have begun wondering if they should price the idea in — is an Apple Inc. (NASDAQ:AAPL) television on the way?

Why should anybody care about the hype?

Technology changes the world, and Apple changes technology. The idea that Apple can position itself in the television market in the same way it has positioned itself in the smartphone, tablet, and computer market is not just exciting for consumers, it’s potentially lucrative for investors.

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Following some nebulous deductions based on Apple’s supposed investment in struggling display-maker and iDevice-supplier Sharp, Focus Taiwan reports that an unnamed source says Hon Hai Precision Industry Co. (a.k.a Foxconn) has begun the “initial phase of tests” on 46- and 55-inch Apple televisions.

“The source also predicted that Apple TV shipments could be huge and that new Apple TV-related products might be put on display at the well-known international consumer electronics trade fair, CES,” reports Focus Taiwan.

An Apple television would enter a space that Microsoft (NASDAQ:MSFT) has been flirting with through the Xbox Kinect — that is, smart home entertainment systems. Google (NASDAQ:GOOG), no doubt, would like to expand its ecosystem and make the jump from a user’s smartphone to their entertainment system.

Apple could open up a whole new market with such a product and, given its current technology and content position, could readily dominate. That’s an attractive scenario for those who have watched their Apple stock tumble over the past few months. Investors will obviously want to be ahead of the curve and buy in before any confirmation of the technology and the markets react by sending the stock price through the roof — but that’s the case with any company launching any good product.

At the end of the day, it seems best to take the rumors for what they are: rumors. Playing the hype is never as safe as playing the company. That being said, regardless of the hype, an Apple investment is one pretty much everybody has looked at.

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