Munster: New Apple TV Not About Revenue, But 'Progressing' Into the Living Room

Piper Jaffray's Gene Munster reacted to news that Apple Inc. AAPL will release its much-anticipated Apple TV in early September. To Munster, this launch is not about Apple generating revenues, rather the Apple TV will "highlight Apple's progressing interest in the living room." Supporting this argument, Munster said that every 25 million TV units would add just 1 percent to 2016 revenues.

Munster speculated that the new Apple TV will incorporate Siri, HomeKit and possibly an app store, while it may also allow users to control a connected home, include other content channels or incorporate a curated offering – though the timing on the latter is unknown. Munster pointed to a Wired interview with Jimmy Iovine that addressed "television delivery systems" as evidence that curated content was in the pipeline.

Munster said that there is just a 50 percent chance that Apple will launch its live streaming video offering in the September event. But, when it does, that video offering will likely include the major network channels alongside certain cable offerings like ESPN, AMC, TNT and TBS. This would put Apple in direct competition with DISH Network Corp's DISH Sling – which launched earlier this year.

Munster held to the firm's $172 price target on the stock, which closed Wednesday at $115.24 after a volatile session. That price target reflects a nearly 50 percent increase in the stock and a valuation of 19x 2016 expected EPS.