Apple News, Analysis and Podcasts

Nielson Reports issued shocking numbers yesterday: TV ownership is set to decline for the first time since 1970, which marks the first time since Nielson started tracking this data. An initial reaction would be to blame the economy for such a depressing year in television sales. However, get beyond the simple reasons for the decline and a different story emerges. And with that different story, Apple is set to enter a market that isn't in decline, but in transformation mode. Apple is once again skating to where the puck is going to be, not where it is.

Neilson noted that "the rich are getting richer" with 56% of this demographic owning 3 or more sets by year's end. Neilson's strength has always been at collecting data, while their understanding of behavior has less than stellar. It seems Neilson is more bent on making a political statement versus revealing what's really taking place. For those with more disposable incomes, sets are now cheaper than ever before. Therefore picking up a 19" HDTV for a bedroom is no more expensive than taking a family of four out to a 3D move with treats. If a Kindle Fire is considered a take-a-chance device for $199, then TV sets that cost only $150 don't require much thought.

But the real reason for the decline in TV ownership is that the majority of consumers are making a huge shift in how they consume video content — and it is through their computers and mobile devices, not TVs. Kids no longer need a set in their bedroom, they have an iPad to catch their latest iTunes, Amazon or YouTube flicks. Others turn to Kindle or are using their laptops. Youthful socialites are texting, Tweeting or Facebooking on their smartphones. The sum is greater than the parts, and the result is TV's highly coveted 18-49 demographic are finding it more attractive to watch video content outside the living room.

Sharp Electronics display division clearly understands the shift taking place. This Holiday season Sharp has engaged in an all out media blitz for their 60", 70" and 80" Aquos Quattron HDTV sets. The TV market is moving from large sets to "Viewmongous" sets, as Sharp calls it. Multiple TV sets per household are going the way of the dinosaur due to video viewing mobile devices. At the same time the living room is becoming the location to hold the big event of the evening.

Apple sits at the crossroads of this transformation. Apple's HDTV sets are likely to be extremely large, leaning towards the 50" - 80" range. In the "new living room" iTV will deliver first-run movies, live sporting events, and late-breaking news, all driven through an integrated iTV experience.

Note the word experience, because that is rapidly becoming the expectation when turning on the TV — an extremely large TV. People are spending less time watching the TV and more time diving into YouTube, FaceBook and Twitter. When people do choose to watch a good big-screen event, it had better be good. If not, consumers won't bother, as there are other higher-interest devices and interactive activities that can fill their entertainment needs.

The TV market is changing, and Apple is more than prepared to take advantage of the shift. Higher priced sets, full integration done right, and large, larger and even larger is the direction. It is a market that Apple will find highly attractive. Toss Siri's voice control into the mix to make the experience dead simple to use, and suddenly Apple leapfrogs the nascent TV industry, all to the approval of consumers.

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