"We believe this announcement is further evidence that Apple is developing live TV and DVR features for its Apple TV product, and will likely launch an all-in-one Apple Television in the next 2-4 years."
● Apple Licenses TV Guide Technology From Rovi; Further Evidence Of An Apple Television. Earlier today (9/20), Rovi, owners of television guidance technology Interactive Program Guide (IPG), announced a licensing deal covering Guide technology for Apple's services (e.g. iTunes) and devices (e.g. Apple TV, iPad). We believe this announcement is further evidence that Apple is developing live TV and DVR features for its Apple TV product, and will likely launch an all-in-one Apple Television in the next 2-4 years. Following its deal with Rovi, Apple would be clear to add live TV, DVR, and guidance features to its Apple TV product, which we believe is a critical step towards an all-in-one Apple Television.
● New Apple TV Will Drive Higher Volume And Is Another Step In The Direction Of An All-In-One Apple Television. We see the new Apple TV, announced on 9/1, as a meaningful change in Apple's efforts in the digital living room. We expect the addition of new content, such as Netflix, in combination with the $99 price (down from $229), will drive higher unit volumes compared to the previous version of Apple TV. We estimate Apple has been selling about 400k Apple TVs/yr, which we expect will increase to about 1.5m Apple TVs in FY11. We estimate the incremental Apple TV units would add ~$50m in revenue to FY11. The negative on Apple TV is that, with the exception of Netflix streaming and AirPlay content from other Apple devices, the device is still relatively light on content. We see the Apple TV as an important step toward an all-in-one Apple television. We continue to expect Apple to launch an all-in-one Apple television in CY12. As consumers gain comfort with connected TVs and apps on their TVs, we believe Apple will eventually take its all-in-one philosophy to the digital living room like it has with the iMac and the iTunes ecosystem.