A Case for an Apple TV SET.
At this point most people seem to want a box hooked up to a dumb monitor. I don't. I just don't believe the reality of the situation would result in something Apple (or myself) would find acceptable.
Right now I have the simplest setup possible, an older 'dumb' LCD, over the air TV and an Apple TV for web content. Also, a game system on the second input. Others have it much worse. A new smart TV with the fancy UIs that most don't find useful and take much longer to browse. Then they must use an ancient cable box hooked up through the input supplying another UI. This all adds many steps in between you and your content. The TVs are slow to turn on and are useless when off. Any sensors or syncing ability is off when switched off.
So here is what I want:
I want a TV that has a sleep mode which keeps sensors and radios functioning and wakes immediately to the content I want to see. The TV is the piece that can handle the high quality microphones, cameras, speakers and processors rather then add-ons sitting above and below your TV.
I don't want to have to deal with an un-needed and subpar interface just to access my desired interface. This is like loading Windows from the DOS prompt. While a truly dumb monitor would be OK, like they are on computers, the industry isn't going this way. The rest of the TV makers aren't going to stop trying to differentiate with software. So like it or not you have to choose a UI with your TV now. Even if it loads you input first, you will have that jarring experience at some point.
I want smart inputs that tie into the UI of the TV. Making game consoles a part of the whole experience rather then just a separate input. Imagine sony creating a Playstation channel on an Apple TV give you access to your games without switching UIs. You could still get content from the TV while playing games and content from the Playstation while watching TV. Same goes for cable companies. They can create content channels that let you view all of your subscribed content from within the Apple TV UI. The box will supply the content like an iOS accessory can now. Basically I'm talking about the ultimate hub. Allowing content from the web and local devices all within the same interface.
So what about the cost:
So the real reason people don't want the whole thing in one box is cost. Many people will keep a set for 10 years. The first point is that this is a habit. We don't mind spending the same or more on a computer every 3-5 years or more. With all the added experience I'm talking about here, I think people would be willing to buy TVs more often. Also, I don't think people are right about the cost of an Apple TV set. There is no reason Apple needs to target the high end of the TV market now. 4k content isn't there and this set will sell on experience not specs. If they start out with 1080p instead of 4k we could see a 42"-46" for around $600-$800. Due to the lack of size constraints, they could get very powerful chips in there at a lower cost. This would easily allow a 5 year lifespan of software updates for most users. Of course they could sell a box for $199 separately to gain market but I think they will want to control the whole experience.
The other option is that Apple offers a truly dumb monitor separately from the brains. This would allow them to control the whole user experience. But at what price? Likely only $100 less then an all-in-one. I don't see this as very likely because it is unclear to the end user what each device is for.
Like it or not part of an industry shift usually requires changes in spending habits. I use to spend $50 on a phone and $30 per month and used it until it literally fell apart. Now I spend $200 plus a much higher bill, replacing it every year. I do this because the experience I gain is worth it. If Apple can nail the experience I don't think they will have trouble getting people to change their habits again. It is what they are good at.