Will Apple build a panel factory to become the "barbarian at the gate" of the TV industry?

Perhaps the saying "the early bird catches the worm" is not suitable for Internet TV manufacturers. After the New Year, some brands that attracted a lot of attention with several "price wars" last year are still silent. Only Baofeng TV seems to have inadvertently leaked its annual goals for 2017. At this time, the "barbarians" at the door seem to be unable to hold back - at the recent Apple financial analyst meeting, CEO Cook hinted that Apple intends to launch Apple TV. There is also news that Foxconn invested $7 billion to build a new panel factory in the United States, and Apple is one of the financial sponsors behind this investment.

Complete machine manufacturing, a done deal?

Apple's entry into the TV field can be said to be a foregone conclusion if there is no interference from "force majeure".

First of all, Apple has been "coveting" the smart home field for a long time.

Ding Technology learned that in order to cater to the trend of smart home and intelligent family, Apple launched the HomeKit smart home platform in 2014. In 2016, Apple launched iOS10 at the developer conference of that year and launched the system-built Home application for the HomeKit platform, making Home directly a pre-installed software of iOS, which shows Apple's determination to enter the smart home market.

If the smart home market can develop further, it will further boost sales of Apple's current main products. If the number of home appliances that support Apple's operating system is the largest, consumers are more likely to buy iPhones and iPads than other devices, ensuring the dominant position of the "main business" that Apple relies on.

Second, Apple needs new business growth points.

In 2015, Apple's stock price fell for the first time in seven years. Ding Technology learned that Apple was affected by the sluggish sales of the 6s series and was committed to promoting inventory adjustments. It implemented a 30% year-on-year production reduction from January to March 2016. However, as sales failed to grow as expected, Apple expressed its policy of extending the production reduction period to its component suppliers. At the end of 2016, Apple's mobile phones had battery-related problems, which affected its brand image to a certain extent.

In addition, Apple's "lack of innovation" has long been criticized. Data shows that Apple's dependence on the iPhone has become increasingly serious, contributing 69.4% of Apple's revenue in the fourth quarter of 2016. In Ding Technology's view, Apple, which has achieved less and less in the forefront of technology, is becoming more and more like a "monotonous" mobile phone manufacturer. Apple, which cannot "disruptively" innovate in the mobile phone field, is bound to find other ways out, especially developing new product categories.

Again, Apple needs to restore confidence in Greater China.

On February 1, Apple released its financial report for the first quarter of fiscal year 2017 (the fourth quarter of 2016), with revenue of $78.351 billion, up 3% from the same period last year, and net profit of $17.891 billion, down 3% from the same period last year. However, this is only the bright part of the data, as the Greater China region, which once contributed the second largest revenue, has dropped to the third, down 12% from the same period last year.

At the end of last year, news began to circulate that Apple wanted to build a factory in India. Given that the Indian mobile phone market has been divided up by Chinese manufacturers and Samsung, Apple's subsequent purpose of building a factory in India is not to fulfill its promise to lower the price of iPhone in India, but to reduce the cost of mobile phones through India's cheap labor and preferential policies, thereby regaining the Chinese market.

In addition, Apple’s recent actions have hinted at its intention to enter the TV set field.

First, Apple recently hired the former head of Amazon's Fire TV department as vice president of Apple TV product marketing. In addition to being in charge of Amazon's Fire TV, this former head also held important positions at Netflix and Roku. The TV box Apple TV can be seen as lacking a prelude;

Second, Apple executives have made it clear that the company will enter the film and television production business, indicating that Apple will "take a three-pronged approach" in terms of software, hardware and content;

Third, the most convincing news is that Foxconn CEO Terry Gou recently revealed to the media that the company is considering a joint investment with Apple to build a display panel factory in the United States, and this panel factory mainly produces large-size panels. Terry Gou said, "Apple is willing to invest with us because they also need displays."

Chain reaction, crisis is coming?

Ding Technology believes that once Apple enters the field of television sets, it will inevitably trigger a chain reaction in the television industry.

The first is the product form.

Internet TV products represented by Apple and Google are also mainly in the form of TV boxes and TV sticks, which are used as upgrade modules for traditional TVs. Ding Technology believes that Apple's move may further accelerate the popularity of smart TVs due to its inherent influence, and further, it will lead to a new round of TV replacement, which is expected to help the entire industry break the growth bottleneck.

The second is the industry structure.

In the view of Ding Technology, during the bottleneck period of "disruptive innovation", Apple can be temporarily regarded as a company supported by its brand power. Its large number of fans means that after launching new products, its sales can be released to a certain extent. In addition, with its exclusive cooperation with HBO and others in content and the formation of content payment habits in Europe and the United States, its overall product is likely to achieve a breakthrough, thus changing the existing industry landscape.

Of course, the main driver of change may not be Apple, but Sharp. Since Foxconn acquired Sharp, Terry Gou has been trying to revitalize the latter's TV-related business. By providing panels and OEM for Apple, Sharp is expected to get out of its current "difficulties" and take advantage of Apple's influence to gain a better position in the global TV market.

Again, it is the technological trend.

Ding Technology believes that this includes two opposite situations: First, according to Apple's usual style, it is likely to adopt more advanced technology in the whole machine. From a global perspective, the most popular display technology is mainly OLED, and the possibility of quantum dots is not ruled out. Sharp, as the technical supporter, has also dabbled in these two technologies. No matter which one is finally adopted, Apple's stirring is likely to trigger a new round of "crowding" of this technology;

Secondly, if Apple adopts a more conservative LCD display, it may be more in line with Sharp's current focus on large-size panel layout. In this way, the true popularization of the "next generation display technology" may be further delayed.

In addition to the above three points, the impact of Apple's involvement in the TV industry on related fields in China cannot be ignored.

Around this time last year, an analyst suggested that Apple "acquire Netflix". In Ding Technology's view, this is a reasonable suggestion. For example, the fourth-generation Apple TV launched by Apple in the fall of 2015 supports applications and games, and has its own App Store, but it still seems thin because Apple TV is ultimately seen as a complete content terminal similar to a TV. In China, some companies that make Internet TVs and TV boxes have their own content sources. Apple also needs to have its own content source, and the reason why Netflix is ​​a reasonable choice is that it may make it easier to promote Apple TV overseas.

The impact of Apple TV on related fields in China is likely to be born with Netflix. According to Hisense’s previous statement, Netflix’s entry into China is almost certain, and Netflix’s CEO Reed Hastings has also said: “Negotiations to enter China are progressing smoothly, and the license may be obtained soon.” If Netflix enters China and Apple happens to acquire Netflix, it may be a matter of time before Apple TV products enter China.

In addition, Apple has a relatively good partnership with content provider HBO, and HBO has cooperation with Wasu and Tencent in China, which also makes it more likely for Apple TV to enter China.

Considering that many domestic mobile phone manufacturers have not been able to "keep the iPhone out of the country", most domestic Internet TV brands that still rely on price wars to survive seem to find it difficult to resist Apple's offensive. After all, once Apple has the opportunity to expand its business in the favored Chinese market, it will certainly not want to "go to the treasure mountain and return empty-handed". Some domestic Internet brands that have emerged due to the situation and lack hardware manufacturing strength, software development capabilities or content ecological layout may be defeated in one blow. Once Apple's TV products enter China, the only hope for the above brands is that consumers will not buy Apple's TV products because of the "expensive" price. However, it should be understood that iPhones and MacBooks are not cheap in China, but they still have a large number of users.

How to enter China when the future is unclear?

For Apple itself, it has the motivation to make televisions and the reasons to bring television products to China. However, the Apple TV TV box has not yet entered China, so is it possible for the entire machine to enter China?

One day at the end of 2015, Apple's smart TV box Apple TV appeared on the Apple Store in China and was quickly removed from the shelves. However, at that time, many people speculated that Apple TV might be about to enter China, because earlier, Apple's official website launched the Chinese version of the Apple TV manual. But in fact, it would not be so easy for Apple TV to enter China.

There are two main issues that need to be resolved for Apple TV to enter China. The first is hardware-related issues, including a series of related certifications for hardware products, such as 3C certification, and the competitiveness of the hardware itself; the second is content localization, which actually also includes content platforms, broadcast control platforms, and content resource partners. Ding Technology believes that, relatively speaking, the smallest obstacle for Apple TV to enter China may be 3C certification, and the main issues are concentrated on hardware performance and content localization.

First, in terms of hardware, Apple does not have an advantage this time. Take the well-received fourth-generation product as an example. When the product was still insisting on 1080p resolution, domestic products had already entered the 4K era, and at the same time, they were cheap, stylishly designed, and had rich accessories. In addition, compared with Internet TV sets, TV boxes did not seem to open up the market in China.

Secondly, Apple has no content foundation in China. As a TV product, content is the foundation, but in China, it is difficult for Apple to find content partners. It can be seen that Xiaomi has invested $1 billion in content layout but still has not made much progress in the TV field. Apple has to take this as a warning. In addition, Apple Music has entered China earlier, but it is not satisfactory. Domestic users are still keen on third-party players.

Finally, Apple has difficulty passing official review. The government wants to make the content on the TV screen visible and controllable, which requires very detailed equipment and operations, and Apple TV is difficult to meet.

However, compared with Apple TV, Apple's whole-machine product entry into China may see a turnaround, which can be seen in the shadows of several of Apple's partners, the first of which is HBO.

Ding Technology learned that in 2015, HBO and Apple reached a cooperation to build HBO Now streaming service into Apple TV. Afterwards, although there were reports that Apple TV sales were not good, there was no news that HBO and Apple had terminated their cooperation. In recent years, HBO has had a relatively good cooperation relationship with China. For example, Tencent has obtained its broadcasting rights in China, and Wasu also has related channels. At the end of last year, HBO also worked with China to launch film content. HBO may become the key to Apple's mediation in China. In addition to HBO's content support, it is also possible to cooperate with Wasu on licenses.

In addition, both Apple and HBO have a certain degree of cooperation with Tencent. Juding Technology understands that iOS10, which was launched last year, has many new features related to Tencent, and this should be just the beginning of the cooperation between the two. Tencent obviously wants to share a piece of the pie in the concepts of "living room economy", "home Internet", "smart home" and "Internet of Everything" by co-leasing with multiple licensees to launch TV products and cooperating with Skyworth to launch TV boxes. Apple, which has mature experience in combining software and hardware, may be a suitable partner, and Tencent, which has rich content resources, can play the role of "content library".

After the large-scale price war in 2016, the domestic Internet TV field may start a round of reshuffle this year. Regardless of whether Apple really gets involved in the field of complete TV sets, all manufacturers need to look at the long-term while changing their earlier "quick success and quick profit" style of fighting for "making money and leaving, satisfying the addiction and dying", return to users, make good products, and seek better survival of the brand, because no one knows who the "barbarian at the door" is and when he will appear to impact the industry. The only thing they can do is to "prepare for a rainy day."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.