Apple TV won’t be coming out anytime soon, that is according to Piper Jaffray senior research analyst, Gene Munster, who believes Wall Street Journal got it right. However, speaking to Fox Business, Munster said that just because plans for the TV set have been shelved, that does not mean Apple Inc. (NASDAQ:AAPL) won’t resurrect the project going forward.
Initially, there were concerns that Apple Inc. (NASDAQ:AAPL) would struggle on the type of content to air on Apple TV, but as it appears that may not have been the only reason the plans were shelved.
“What killed it was the experiment with different options, like FaceTime and Siri and they made the decision that there was just not enough substance there for them to compete in that market. I think they had some aspiration around the features, they spent years looking at it and at the end of the day they shelved it.”
Apple Inc. (NASDAQ:AAPL) shelving plans for a TV set is, on the other hand, is big news for Samsung and Vizio all which could have felt the full effects in terms of competition on Apple unveiling a new product. Munster and the Wall Street Journal sentiments continue to be quashed by billionaire investor Carl Icahn, who insists that Apple TV plans are as active as ever.
Sentiments by Icahn raises further concerns on who is saying the truth as he maintains a close relationship with the company based on his 53 million share holdings in the company that makes him one of the largest shareholders.
Making a TV set from scratch is not an easy thing to do as it involves lots of manufacturing costs and putting everything into place. The TV industry is also not one of the best in terms of returns when compared to the smartphone business where Apple has created an empire.
Despite the unexpected news on Apple TV, Munster remains bullish on the stock affirming a share price target of $162 a share. However, the analyst believes Icahn’s $230 a share price target might be too aggressive.
“I think by this point some of his assumptions to get to that $230 price target is pretty aggressive. We are optimistic about the stock we think it goes to about $162, but one aspect to that $250 is an expansion of the multiple going from 15X earnings to 20X. That is a little bit hard to do when you are coming out of a big product cycle; typically you get multiple contractions,” said Mr. Munster.
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