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Debate hath ended: iTV coming from Apple this year

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Coming soon to an Apple Store near you: iTV?

Will they or won't they? That's been the burning debate in tech/Appleology circles over whether Cupertino will roll out a high-end, thoroughly Apple-ized high-def TV. I've been pondering this question pretty regularly, given that I think Apple is at the tail end of an innovation cycle that started with the iPod (reinvented music), then moved on to the iPhone (an iPod with a phone, re-invented mobile), and then brought out the iPad (a big iPod, poised to decimate the low-cost PC market). What's next?

A TV set — versus the current AppleTV box — seems obvious. The reinvention factor will be the delivery of TV content. And therein lies the challenge: Apple has put, in sequence, the music industry, the wireless industry, and the publishing industry at its feet. Will Hollywood and the cable companies agree to play by Apple's terms?

I doubt it, and what that means is that the iTV will be the highest of high-end products. As my favorite tech writer, Zach Epstein at BGR, deftly and decisively points out:

Apple’s upcoming entry into the high-definition television space is set to blow the high end of the TV market wide open while current market players continue their struggles to compete on price. Market research firm KAE along with online polling company Toluna recently conducted a survey and determined that 25% of consumers in the United States would purchase a physical Apple television set if the Cupertino-based company launches one. Beyond early consumer interest, however, current TV industry players may have left a gaping hole that will bring Apple billions when it fills the void.

According to Epstein's post, Apple could build iTV into a modest $5-10-billion business. Technologically, I'm not sure that this would even be all that hard — an iTV would simply be a big monitor with processing power built in. Unlike with iPhones and iPads, batteries wouldn't be an issue. The thing will be attached to a wall and plugged in the old-fashioned way. Will there be a unique remote? Or will it all depend on an iPhone/iPod/iPad interface? That would keep smudges off the screen, obviously.

The biggest limiting factor here to making iTV into a huge business would be that consumers don't buy TVs that often. So the two-year iPhone product-cycle bonanza wouldn't really be there. But if iTV does appear, and it does become a $10-billion business, it takes pressure off Apple to sustain iPhone sales, and it sets up a whole new content-based revenue stream, with Apple taking its customary 30-percent cut.

Follow Matthew DeBord and the DeBord Report on Twitter.

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