Home >tech-news >news >Carl Icahn thinks Apple should make TV sets

New York: Activist investor Carl Icahn says it’s time for Apple Inc. to get into the business of making TVs.

In an open letter on Thursday to chief executive officer Tim Cook that focused on the need for more share repurchases, Icahn also said there’s “good reason to expect" Apple to introduce an UltraHD television in fiscal 2016. Icahn said Apple would be able to sell 12 million of the 55-inch and 65-inch TV sets that year and another 25 million in the company’s 2017 fiscal year. Each TV set would only cost an average of $1,500, Icahn projected.

“Televisions are a centerpiece to the modern living room and thereby a promising gateway into the home for Apple’s growing ecosystem," Icahn said, including the caveat that Apple “has not announced plans for a TV set and may never do so."

The idea of Apple making TV sets has long been batted around. So far, the company has only introduced Apple TV, a $100 Internet-connected set-top box that lets users stream video from iTunes or Netflix on a television. Cook has been steadily adding more programming to Apple TV, such as ESPN and HBO, after years of calling it a “hobby." Apple TV, which was introduced in 2007, competes with the likes of Roku Inc.’s device, Amazon.com Inc.’s set-top box and Microsoft Corp.’s Xbox.

“We think television represents a large opportunity for Apple, one that reaches far beyond ‘the hobby’ that Apple TV currently represents," Icahn said in the letter.

It’s not the first time that Icahn has suggested that the tech giant build TVs. In a letter to shareholders earlier this year, he said it’s worth considering the possibility of Apple making TV sets as it looks for new products and markets to enter.

TV interest

Eddy Cue, the head of iTunes, hinted at the Code conference in May about Apple’s interest in television. He said the TV— viewing experience today is poor and that it’s a hard problem to solve because of all the different parties involved, including media and pay-TV companies. He declined to elaborate on the company’s plans beyond that its Apple TV product will continue to evolve.

Apple could sell UltraHD movies and shows through iTunes that would be delivered straight to its branded Internet- connected TV, Icahn said.

Apple’s former CEO and co-founder Steve Jobs, at a conference in 2010, boiled down the hurdles against building TVs to the difficulties of entering the TV market. There’s no national cable operator to partner with and the technical standards are different for each country, he said.

‘Market problem’

“The TV is going to lose until there is a viable go-to- market strategy," Jobs, who passed away in 2011, said at the time. “It’s not a problem with technology, it’s not a problem with vision, it’s a fundamental go-to-market problem."

Icahn’s projections for TV sets are part of his broader analysis of how Apple’s products, including iPhones, iPads and the new Apple Watch, will accelerate earnings growth.

Even if Apple chooses to bypass TV sets, the billionaire says his projections for earnings growth will hold true. He said that those estimates indicate that Apple is “dramatically undervalued" and the stock should be trading at double its current price. Bloomberg

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