Microsoft Living Room Strategy Beats Apple TV

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Apple Inc. (NASDAQ:AAPL) is planning on bringing out a television next year, or at least that’s what Gene Munster reckons. Neglecting the fact that the company has been rumored to be on the cusp of a TV release for years and assuming Munster’s report to be true, the company may already have lost the race for the living room.

Microsoft Corporation (NASDAQ:MSFT) will release the Xbox One on Friday. The games console is the center of the firm’s living room strategy. It seeks to push the sale of more Microsoft devices across all platforms and put the Redmond company at the forefront of content.

Microsoft Runs Away With Television

Apple Inc. (NASDAQ:AAPL) took over the smart phone market because it was the first to release a polished device, and competitors took a long time to respond. The company didn’t do as well with the iPhone because other companies responded more quickly to its threat. If Apple does release a TV it will be way behind already.

Smart TVs have not been very good, but they have been on the market for years. What they need is polish, and it appears that Microsoft Corporation (NASDAQ:MSFT) is going to do that. The company’s Xbox One supports voice and gesture channel surfing and puts the television’s entire functionality under the Xbox’s control.

If that product works half as well as advertised Apple is in trouble in the race for the living room. Microsoft is going to sell millions of Xbox One boxes in the coming months. Apple Inc. (NASDAQ:AAPL) won’t have any device to compete until Q3 at the earliest. It will likely cost much more than the Xbox One for a similar solution.

Apple Needs A New Product

The full Apple television set rumors are a subset of the new product rumors that have dogged the company in 2013. The Cupertino company has given no indication that it will launch a new product any time soon, but analysts seem to agree that it needs to in order to preserve shareholder value.

It cannot release an above average product at three times the price into a competitive market. The product will do little for the impending slowdown of iPhone profits, and will have little impact on the market. Apple Inc. (NASDAQ:AAPL) needs to turn the television into something it isn’t in order to succeed in the market.

The Apple Television needs to be more than an excellent controller. Microsoft Corporation (NASDAQ:MSFT) is going to be offering that. It needs to do more than offer access to the content everybody already has their hands on. Microsoft is going to do that too.

Apple needs to reinvent the television if it wants to break into that market. The company’s fans almost certainly believe it can do so, but there is little certainty. Microsoft is already way ahead on this front, and the company is likely to improve from here.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.