Apple's iTV rumor - a look at the numbers

Apple has invited the media to a music-themed event on September 1, leading to much speculation about what might be announced. Here are the potential announcements being kicked around:

• Revamp to the iPod lineup;
• TV show rentals for $0.99; and
• An "iTV" product that might be a stand-alone set-top box like the Apple TV or an integrated connected TV.

The big question regarding Apple is whether it will continue to pursue the development of a stand-alone set-top box or develop a fully-integrated connected TV. The market for the stand-alone boxes – what Parks Associates terms Digital Video Players – will hit ten million unit sales in 2014, with total worldwide household penetration of 50 million households. However, the connected TV market is significantly larger. Worldwide sales in 2014 are expected to exceed 120 million units, with total worldwide penetration of more than 250 million households. Apple will likely choose the stand-alone device path, as the integrated connected TV market is already dominated by large consumer electronics manufacturers willing to trade lower margins for higher volumes of shipments.