Musing on Apple Building a Television - Jeremy Toeman

http://www.livedigitally.com/2011/08/26/musing-on-apple-building-a-television/

People also need to remember that ten years ago Apple was on the ropes. Apple is not infallible.

I get wanting to enter the TV business, as Apple wants to conquer the family room and be the "hub" of family entertainment and communication. The Apple TV would offer that, plus make using only Apple's exclusive services that much easier, like iTunes and iTV.

As Toeman points out, TVs are a low margin business with a long replacement cycle (getting a new television every 7 to 8 years is the norm), not Apple's usual forte. But the TV business is not the business they are going for, it's the loss leader. The business is the services and the bundles that would, in theory, emanate from a singular hub that run's a family's entertainment menu and their communications like phones and e-mail. What Apple wants, what everyone wants, is to have such a foothold in the family room that then they can dictate to producers of entertainment what the terms will be, or else those producers are shut out of the market. That is the business they are going for, one which they are willing to lose some dollars on gaining that foothold.