Does an Apple iTV Make Sense?

apple tvA recent rumor from the DigiTimes suggesting that Apple (NASDAQ:AAPL) is in talks with the Korea-based panel maker LG Display (NYSE:LPL)  regarding the purchase of 55-inch and 65-inch Ultra High-Definition television panels has reignited speculation about the Cupertino-based company’s interest in developing an Apple television set, or “iTV.” However, some analysts wonder if a television set can really be a viable product for Apple.

Although some commentators believe that Apple will try to produce a large television with a Retina display, others note that a device with a Retina display that large would be prohibitively expensive. “I think if they put a Retina Display [in the TV] and the main screen size is [at least] 50 inches, I think the price point of that device will go for more than $25,000,” said Global Equities Research’s Trip Chowdhry via Benzinga. “The cost of the Retina Display grows exponentially,” he added.

However, a traditional Ultra HD display television costs much less to produce. Benzinga reports that TV makers have recently brought the average price of large-screen Ultra HD television down to less than $10,000 from $20,000, just over the last few months.

On the other hand, Mike Elgan at CultofMac notes that televisions tend to be “low-margin consumer products.” However, instead of marketing the iTV as an Apple-branded television set, Elgan believes this future product will be sold as a “really big iPad or a really big iMac.”

Like many other commentators, Elgan also believes that this device will feature Siri-based voice commands, motion-sensing control functions, and iPhone or iPad compatibility. If Apple really is planning on releasing an Ultra HD display television, this would seem to be an opportune time.

The Apple TV media streaming device already holds a 56 percent share of the global IP streaming devices market according to a report from research firm Frost & Sullivan, and the market for Ultra HD display televisions is rapidly growing. According to The NPD Group’s Display Search research firm, Ultra HD panel shipments will reach 2.6 million units in 2013, a 40-fold increase over last year.

Here’s how Apple closed out the week on Friday.

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