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An Apple TV need not be expensive

Just as the iPad was released at a modest price, so too could a TV that makes its money through software.

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With Apple officially confirming its next product unveiling will happen on Mar. 7, speculation about what’s to come can now kick into overdrive. Guessing what the notoriously secretive company is going to unveil next is easily the technology press’ favourite pastime.

It’s with good reason, too. Over the past decade, Apple has revolutionized and created entirely new product categories, from MP3 players to phones to tablet computers. While the company may ultimately end up with only a slice of the markets it creates, partly because it insists on tight control over all aspects of its products, there’s no doubt it’s a leader in consumer electronics.

That explains all the hype and interest in its events. While Apple often trots out incremental upgrades to existing product lines, everyone really tunes in to see whether the company has something potentially game-changing up its sleeve.

Looking at the the media invitation (pictured), it seems like no brainer that the next iPad will be introduced at the event. The device is expected to be faster with a better screen resolution and cameras, possibly with Siri voice control and/or 4G wireless connectivity. There are also a bunch of other potentials—I’d like to see stereo speakers, for example, while others are hoping for a smaller and cheaper version of the tablet.

The real question is whether there’ll be that “one more thing,” which in this case could be the television that departed founder Steve Jobs hinted at in his biography. As he told biographer Walter Isaacson:

I’d like to create an integrated television set that is completely easy to use. It would be seamlessly synced with all of your devices and with iCloud. No longer would users have to fiddle with complex remotes for DVD players and cable channels. It will have the simplest user interface you could imagine. I finally cracked it.

Speculation over a proper Apple TV—a full flat-panel screen, as opposed to the set-top box currently being sold—has been rampant since Isaacson’s book came out last fall. A few tidbits, like Best Buy listing such a television in a consumer survey, have leaked out over the past few months, but there’s been nothing concrete. A Globe and Mail story a few weeks ago also served to confuse the issue by suggesting that big TV providers Bell and Rogers were looking to get a piece of Apple’s supposed product. Why the company would want or need to partner with a service provider for such a device—much less in Canada—is anyone’s guess.

Ultimately, it’s not hard to imagine what an Apple-produced television set might look like. It could be a giant iPad, where live TV is merely an app on the screen, and it’s controlled through an iPad, iPhone or iPod or via Siri.

Why would Apple want to get into such a fiercely competitive market, where profit margins are thin and shrinking? The answer is simple: apps.

As has been evident from the past few Consumer Electronics Shows, TV makers of all stripes have been busying themselves for years now building up app stores for their increasingly Internet-connected flat-panel TVs. In essence, they’ve been trying to recreate Apple’s incredible success with apps in phones and tablets.

For Apple, making the jump from those smaller screens to the bigger one could be easy and highly profitable. As the biggest and most established provider of apps there is, developers would likely flock to create apps for its television, which could also interact with the company’s mobile devices. It’s reasonable to expect that such an app store would quickly dwarf rivals’.

What kind of apps could we expect to see on such a TV? A PVR app linked to cloud storage is the first one that comes to mind. The TV could record a show—no expensive box from the television provider required—and store it in the cloud to be watched on the Apple television, iPad, iPhone or wherever. Having Siri integrated into the TV could also be cool (“Siri, find me something to watch that doesn’t suck”). There have been some efforts at this sort of thing with varying degrees of success, but Apple does have a knack for getting the fine polish right.

An Apple-produced television shouldn’t be worrying to just other manufacturers, it could also be a problem for the likes of Sony, Microsoft and Nintendo. Many of Apple’s most popular and highest-grossing mobile apps are video games, to the point where they’re already taking a chunk out of portable systems such as Nintendo’s 3DS. Apple having a video game distribution window into consumers’ living rooms could be a big threat to the established console makers.

An interesting side effect of all this might be a duplication of what has happened in phones and tablets, where the only way for rivals to compete with Apple’s app dominance was to adopt Android and its app market. Could a Samsung TV running Android be far behind? Needless to say, this would be even more bad news for RIM.

For all these reasons, an Apple television need not be expensive, as some have speculated. The company could go with the razor-blade model, where the razor itself is cheap and the money is made on the blade refills. In Apple’s case, the refills are the apps and related downloadable content. Just as the iPad was released at a comparatively low price ($500), so too could a TV that makes its money through software.

Naturally, short of the company actually saying anything next week, any discussion of an Apple TV is just speculation. Some analysts say there is no evidence that the company is ordering the parts necessary to manufacture such a device, so it’s possible that expecting a reveal at the event is premature. I’ll be there regardless—be sure to follow me on Twitter—just in case it does happen.