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By Carl Howe

Thursday's Wall Street Journal noted that companies like Office Depot (NYSE:ODP), Home Depot (NYSE:HD), and RadioShack (NYSE:RSH) are branching out into flat-panel TVs. With companies like Circuit City (CC) and Best Buy (NYSE:BBY) reporting robust profits driven by flat panels, we shouldn't be surprised at these retailers suddenly embracing flat panels.

But the recipe for flat panel HDTV success is complicated. Dell's (NASDAQ:DELL) HDTV business, for example, has basically flopped because of poor quality and even worse marketing. H-P's (NYSE:HPQ) flat-panel business is similarly floundering. This isn't the PC business where a few component choices and low prices drive mass adoptions; it requires equal parts of stylish design, consumer marketing, differentiation, and high-technology support. Retailers are not going to find success by outsourcing those key differentiators.

And the big box retailers aren't necessarily an answer. Why? Because any big box retailer like Home Depot isn't just going to carry the best flat panels. They are going to promote choice for consumers, and that means the typical big box video wall of TVs. The only problem: that is nothing like the typical consumer's living room, and that means a lot of consumers will make poor choices for their homes, especially under the watchful gaze of the commission-driven sales person. That means dissatisfaction, returns, and lost profits.

But it is a different story for Apple (NASDAQ:AAPL), just as music and PCs were. Apple has design icon Jonathan Ive (among many other great designers), one of the best and most powerful brands in the world, incredible differentiation, and is repeatedly ranked number one for product support. It has a chain of 161 stores that generate 67% of the revenue of Best Buy with 10% of the floor space. And most importantly, Apple sells experiences, not low-priced hardware. They'll offer two or three choices to avoid the tyranny of too much -- and amaze everyone again by making more profits on fewer products.

We saw Apple's iTV set-top box last week, showing the company has targeted the living room as its next frontier. A $299 set-top isn't going to boost Apple's revenues to new heights, but beautifully designed, elegant flat panels would. And such products at stylish stores would extend the company's reach far past computers and iPods into a wide swath of consumers who just aren't going to drop $3,000 or more in a high-touch lifestyle purchase at Home Depot.

In my view, it's not a matter of if Apple will enter the flat panel market; the only question is when.

Update: Apparently, I'm not the only one who thinks this. John Montellaro over at The Mac Observer just wrote an article that comes to a similar conclusion from a different set of premises.

Disclosure: Author owns shares of AAPL

Source: Why Apple Will Enter - And Win - the Flat Panel TV Market