Apple TV: Wall Street Gets It Wrong Again
Financial analysts take a second morning view of Apple's new HD download service.
By Swanni
Apple TV owners can now download the high-def movies from iTunes and watch them on their widescreen TVs, company CEO Steve Jobs said at the Macworld conference.
The announcement sent shares of video retailer Blockbuster plunging 17 percent on Tuesday due to fears that Apple might dominate the home entertainment category. Financial analysts hailed Apple's new service as revolutionary.
But it appears now that Wall Street is already recovering from its initial intoxication with Jobs' announcement. Blockbuster's stock yesterday jumped 17.8 percent after analysts started offering second-day opinions on Apple's new service.
"Our sense is that only a small number of consumers would be willing to pay the extra cost and add another set-top box to their living rooms," JPMorgan analyst Barton Crockett said yesterday, referring to the Apple TV set-top.
Michael Pachter, an analyst with Wedbush Morgan Securities, said Blockbuster analysts and investors initially "panicked" at the Apple news.
"They thought if Apple is in the market, they're going to own it," he said, according to Video Business. "They realized today, no they're not."
Of course, if the analysts and investors had read TVPredictions.com on Tuesday, cooler heads may have prevailed a bit sooner.
In a commentary posted here Tuesday, I pointed out the many flaws with Apple TV and its high-def download service, including America's "set-top fatigue."
Crockett is right about people being hesitant about adding another TV-based set-top to the living room -- but I have been saying that for a year!
Of course, this is not the first time that Wall Street has gone off the deep end on new technology services, particularly when they come from industry superstars like Apple.
For years, analysts said TiVo would dominate the living room; it hasn't. They said Interactive TV would be a huge hit; it wasn't. They said Apple's video iPod would lead to millions of Americans watching TV on 2.5-inch screens; hardly -- Nielsen says only two percent of all content on video iPods is actually video. (The rest is good old audio, which the iPod does so well.).
And I could name another 50 examples.
In general, Wall Street analysts don't understand what the average consumer wants when it comes to technology because they live in an echo chamber. They talk among themselves and with other tech-savvy people where they are based, which are largely urban areas such as Manhattan.
The analysts think technology is cool; fun; and easy-to-use. Well, it's cool and fun all right -- but often NOT easy-to-use, convenient or needed.
But whether it's TiVo, Apple TV or any other new fad, analysts have a tendency to immediately pronounce it as the next big thing and urge their clients to invest.
My advice to you: Buyer beware.
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Swanni (Phillip Swann) is
president and publisher of TVPredictions.com. He has been quoted in
dozens of publications and broadcast outlets, including CNN, Fox
News, Inside Edition, The New York Times, The Washington Post, The
Chicago Tribune, The Financial Times, The Associated Press and The
Hollywood Reporter. He can be reached at
swann@tvpredictions.com
or at 703-505-3064.
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