Apple today told us that Steve Jobs' hobby has finally turned into a business. the hockey puck size Apple TV set top box has sold 1 million times.
Given its $99 price, this should not come as a surprise, but the question is what Apple will do with this installed base as it knows that it has now found the sweet spot for the device.
It appears that analysts are already anticipating the next stage for the device, which could be what the name of the device indicates: A real, LED TV that integrates the Apple TV box. The hardware isn't the limiting factor anymore. If Apple believes that it can bridge over to the LCD/LED TV market, then it may be just a matter of time until we are seeing a white flat screen TV with an Apple logo.
"Longer term, we believe Apple has larger ambitions in the TV market, and the new version of Apple TV is just the beginning of something much larger," wrote Ticonderoga analyst Brian White in a research note to clients. "Keep in mind, the global LCD TV market is estimated at nearly $100 billion in 2010 revenue by DisplaySearch and the U.S. TV advertising market is estimated at $70 billion by Google."
The TV space could be the next area where Google and Apple are competing much more fiercely. "In our view, Apple is one of the few companies in the world that will be able to offer consumers a broad digital media ecosystem with iTunes, iBooks and the App Store", White said. "Additionally, Apple arguably offers the most aesthetically pleasing consumer electronic products in the world. Keep in mind, the TV is at the center of living rooms around the globe, and an Apple TV would likely be a big hit, in our view."
White argued that it would be difficult for traditional LCD TV makers to compete with Apple due to the ecosystem Apple has built. If that is the case, then many TV makers would have to rely on Google's products to be able to deliver a competitive product.