Foxconn reportedly begins trial production run of Apple TV set

By on May 28, 2012, 4:00 PM

Proving that they have an uncanny ability to generate rumors, Apple is once again in the headlines with claims that Foxconn is in the trial production stage of manufacturing Cupertino’s television set. The iTV is reportedly being built at the Fuji Kang Longhua factory in Shenzhen according to informed sources as reported by China Business News.

Apple Insider points out that production runs like this result in a small number of products being manufactured for the sole purpose of quality control testing and design verification. General production is still expected to take place later this year.

This isn’t the first we have heard that Apple’s iTV is heading to manufacturing. Earlier this month Foxconn chief Terry Gou reportedly said during a press conference that his company was preparing facilities to build the long-rumored television set although manufacturing had not yet started.

Foxconn issued a statement denying the claims just days later, saying that Gou at no time confirmed that Foxconn was developing or manufacturing any product for any customer. The whole thing, according to Foxconn, was a misquote.

Piper Jaffray analyst Gene Munster would like to believe the latest rumor as it would back up his research note from late last week. In the note, Munster said he believes that Apple will introduce their television set in December and ship it sometime next year. He expects the set to cost between $1,500 and $2,000 with sizes ranging from 42-inch to 55-inch.




User Comments: 3

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gwailo247, TechSpot Chancellor, said:

Is there going to be some "game changing" aspect to the TV, or will it be basically a TV with a tiny Apple computing device attached to it?

I'm sure that the iPad/iPhone/iPod will double as a remote control for this, and it will be able to access all your iDevices to display everything. Which in and of itself is cool, but this is not going to be some kind of adjunct to your regular TV if its going to ship at 42-55 inch sizes. Those TVs are huge, you can't just have two of them in most rooms.

I'm wondering what they'll include to make the purchase worthwhile. But then they've never really been wrong in predicting the purchasing decisions of the American public.

Raygun said:

<p>Is there going to be some "game changing" aspect to the TV, or will it be basically a TV with a tiny Apple computing device attached to it?</p>

<p><br /></p>

<p>I'm sure that the iPad/iPhone/iPod will double as a remote control for this, and it will be able to access all your iDevices to display everything. Which in and of itself is cool, but this is not going to be some kind of adjunct to your regular TV if its going to ship at 42-55 inch sizes. Those TVs are huge, you can't just have two of them in most rooms. </p>

<p><br /></p>

<p>I'm wondering what they'll include to make the purchase worthwhile. But then they've never really been wrong in predicting the purchasing decisions of the American public.</p>

The difference is that the apple products that have all done well are ones you can show off to your friends and they have been subsidized or fairly inexpensive to start with, not inexpensive for the category, but not a terrible amount of cash needed up front. Also, apple makes their profits with 40+ points of margin (close to a %) so figure if something apple sells is 1000 retail, they are making over 400 dollars profit. Most TV's sold run in the 5 to 15 point profit range.

So, the issue I see is A, apple will not make the money they need to maintain their margins or B the TV will price itself out of the market. A reasonable 50" 1080P television will cost more then an imac and even more money if they make 40 points on it. Apple will be selling TV's that are no better in picture quality for a FAT premium.

They are waging their bets on fandom for the sales of their TV's (if in fact they are making one). But I cant see anything outside of working in the apple ecosystem that will make these TV's appealing. Apple does not have the scaling tech nor the tech to make the picture any better then a high end samsung.

It will be interesting to see what they are going to offer, because I just cant see any reason for them to exist in the already over saturated TV market place.

Guest said:

Raygun: concur. The other factor to consider is that Apple like to enter a new market with a substantially differentiated product, if not create a new market. Apple isn't interested in competing for 5% margins with a similar product to another 5+ manufacturers, rather they will either create a whole new market (somehow) or make their product so differentiated, it's in a category of it's own. (Eg: iPhone.)

But I don't see what Apple can add to a standard flat-screen TV that will make it so compelling for buyers to pay extra. Especially considering the 40-55" flat-screen TV market is quite mature, saturated with products, and the market is already well supplied. (Only die-hard Apple zealots will toss their existing flat screen for one with an Apple logo.)

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