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Apple Inc. (NASDAQ:AAPL) Boring iPhone 7 In Shadow of Confused TV

Apple Inc. Television

Apple Inc. is counting down to the release of its iPhone 7, the latest in Tim Cook’s line of world-beating smart phones, on Wednesday September 9. If the rumors swirling around the major tech event are to be believed, however, it’s not the iPhone 7 release date that people will be waiting to hear about. The firm has something much better up its sleeve.

Apple Inc. Television

The next Apple TV will be a major turning point for the set top box market. Apple will finally add an app store to its living room offering, and the firm is going to put a lot more resources into making you want to use the device. That’s a big inflection in Apple’s business and both shareholders and tech fans will be putting strong focus on the Apple TV at the expense of the iPhone 7.

 Apple TV puts focus on gaming

In a Sunday feature the New York Times revealed that the Apple TV we’ll see on Wednesday will have a major focus on gaming. Nick Wingfield, who authored the piece on the set-top box, said that “people briefed on Apple’s plans” saw gaming as a major focus for sales of the next Apple device.

They said that the Apple TV will start at around $150, and it will have more graphics power as well as a remote that will double as a gaming device.

Those used to gaming on the Xbox and Playstation may not be wooed by the new Apple TV, but it could be an attractive purchase for those that play on their smart phone but aren’t interested in a hardcore experience.

That’s a key market, and it might be a great way to get Apple fans to shell out $150 for a machine that will, in turn, do its best to sell them games. It’s not a completely new angle for Apple. The firm’s iOS App store puts a premium on games downloads, but it is a change in the story behind the release of the Apple TV.

Apple TV gets a new narrative

The new Apple  TV was first rumored for release at WWDC 2015 on June 8. Back then the device was a vehicle to deliver an Apple live TV streaming service to the world. The release of that service was pushed back, as was the release of the TV hardware. It’s back now, and set for a September 9 release, though with a different story backing it up.

Gaming is a big market, and nobody is really able to do it right. Though firms like Electronic Arts and Activision blizzard have managed to stabilize their business in recent years, neither firm is pulling a software-like margin from gaming.

On the platform side neither Sony nor Microsoft have failed to turn their gaming dominance into anything more than a sideline in their earnings reports. Apple, through iOS and the App Store, has reaped real rewards from gaming at a high margin. It may be about to do the same for games in the living room.

That’s the story that appears to be driving the Apple TV right now. Hopes for a TV Streaming service seem to have fallen into the background. The kind of deals that Apple needs to make in order to get that service up and running are complex and Tim Cook doesn’t seem to want to take chances by releasing a half baked device.

The key question is whether Apple will focus on one or the other, or try to combine both its TV offering and gaming, into its launch of the Apple TV next week. The set top box had better be exciting because the firm’s other product, the iPhone 7, has lost some of its sheen heading in the September 9 launch.

Apple iPhone 7 is a boring king

Even with the Apple TV bringing major changes to Apple, and vice versa, this time around, the iPhone 7 is still going to be the sales king for Apple. Part of the reason that the iPhone 7 specs seem a little underwhelming and un-exciting this time around is that we’re already sure of what it’s going to look like.

There’s two factors that have played into this. First we know that the iPhone 7 isn’t a major release and we’re sure that it’s going to derive a lot of its design and features from the iPhone 6. Second it seems that supply chain rumors are getting better and better.

Ming Chu Kuo of KGI Securities has been painting the same picture of the iPhone 7 specs, more or less, since March of this year. The analyst, who has a lot of sway in the Apple rumors community, has been backed up by part leaks from the supply chain and other rumors.

All of that comes together to make the iPhone 7 release date one of the most predictable from the perspective of almost all of those that care about Apple Inc. and the firm’s smart phones.

Lucky for them, the Apple TV will be launched on September 9 and, despite the confused story around the device in recent months, it should bring some heat to Apple’s business in the year ahead.

In a report issued last Thursday September 3, Oppenheimer analyst Andrew Uerkwitz, said that Apple’s plans for the year ahead were “underwhelmingly brilliant.” Though the iPhone 7 will be a great piece of tech, it won’t be enough to make those with money in Apple shares happy.

No matter what the iPhone 7 specs end up looking like, it seems clear that sales growth in Apple’s smart phone business will slow down or even reverse. The massive growth seen after the release of the iPhone 6 is almost impossible to repeat given the number of people on earth and they amount of money they tend to have.

The iPhone 7 is going to be a little bit boring. There’s little enough that Apple can do to make the smart phone amazing, especially after the blow out release of the iPhone 6. Mr. Uerkwitzz went so far as to say an incremental camera improvement would be the most prominent feature.

The Apple TV is more exciting. It opens up some new opportunities for Apple to grow sales. With the confused narrative around the device, however, it’s difficult to see how Tim Cook and Phil Shciller plan to handle the launch. That will be interesting for all Apple watchers, both device fans and investors, to keep track of next week.

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