Apple TV may 'transform video industry'  


 

 
The Apple TV is more than a media centre, analyst notes 
 
by Jonny Evans: 
The release of the Apple TV has driven Think Equity analyst Jonathan Hoopes to reiterate his "Buy" rating on Apple, citing a $120 price target on the stock. 
 
The analyst believes the combined punch offered by the device in combination with Apple's industry-leading iTunes Store could transform the video industry in the same way as the iPod and iTunes changed the music business. 
 
 
Hoopes writes: "We think the Apple TV/iTunes combination could become as disruptive to legacy video purchase-and-consumption behaviour as the iPod/iTunes combination has been to the traditional music business model." 
 
The Apple TV will offer much more than just a computer in the living room, he told clients in an extensive note released this morning. 
 
"Apple TV functionality will likely be much more than that of a PC in your living room," Hoopes notes, adding, "We remind investors that software holds the key to further share gains and margin expansion." 
 
He predicts that the device will achieve widespread adoption and enable Apple to explore film download, TV recording and games development through the device. 
The device is, "an ideal conduit for multiple services including DVR, paid-for content (such as video-on-demand), gaming, or advertising," he writes, adding, "we identify and value these business opportunities at $5.3-$11.4 billion." 
 
He anticipates the product and associated services from Apple will yield at least $10 per share in gains for the company. 
 
"Our conservative adoption model points to AppleTV penetration of 25-70 per cent among Mac users (versus the 150 per cent achieved by the iPod) not to mention many, many more PC users," he notes. 
 
The analyst also notes that subscription-based services – such as online games or film rentals – could be made possible through Apple's front room media centre. 
 
source:MacWorld 

Posted: Tue - March 20, 2007 at 10:32 AM        

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