Three reasons:

Limited screen choices. Some people want medium size screens, some want big ones, some want huge ones, Some people want LCD screens, some want plasma, some want an LCD or DSP projector, some are eying OLED. Apple is likely to bring out only one screen technology in at most a few sizes.

Competition and timing. Other companies are already jumping on the rumors and bringing out TVs that are better integrated with the net and with easier user interfaces. At this year’s CES we see Nuance showing a voice activated TV interface. Apple will do these things much, much better, but they will also wait until it works very well and decent content is lined up before even making any announcement. Credible competition will be on the market by then. And if people have already bought an expensive new TV they aren’t going to buy another one right away.

Steve is gone. Apple has great people in place who work well together, but Steve was the final arbiter and quite often made last minute calls that improved the product greatly. As one example, remember when at the last minute Steve made a change in the first iPhone from giving it a plastic screen to a more expensive but durable glass one? Imagine the iPhone coming out with a scratchy plastic screen instead of the awesome gorilla glass! These are expensive, scary kinds of calls that only Steve could push through.

My suggestion is to make a new generation Apple TV box. This has many advantages and one big drawback.

Why does Apple want to be in the TV itself instead of in a set top type of box in the first place?

First, this puts the Apple software in the first input rather than the second. Any add on box has to go into some kind of Aux input and thus can’t pre-empt the main input. We see this in the current Apple TV box. If I’m on my iPad and I have a video I want to throw on the TV, it’s easy to tell the iPad to put it on the Apple TV box through AirPlay. But there is a show stopper – I also have to switch the TV input from the main cable box to the aux input my Apple TV box is on. With AirPlay built right into the TV, It will switch over automatically.

Second, an external box can’t integrate very tightly with the TV. The Apple TV has an HDMI output which sends audio and video, but it can’t change the TV input, channel, volume, see what channel it is tuned toor anything else. By being built into the TV, this is all solved. And by building the TV itself, Apple can do tricks no other TV can, witness their recent patent on unique ways to make black letterbox bars truly black by manipulating the backlight.

The first problem is solvable. Just add an HDMI input to the current Apple TV box, and place it between the tv and the user’s cable box. This lets the Apple TV take over the top tier input for AirPlay or viewing content, let’s it overlay it’s own video on the cable’s video, and so on.

It is the second problem that caused, I think, Apple to decide to actually manufacture a TV. The traditional solution, putting an IR blaster on the Apple TV to let it imitate a TV or cable box remote control is so kludgey and hard for the user to set up that I’m sure Apple could never stomach it. Very tight integration between hardware and software has always been the key to Apple’s success. I believe in coming years the problem could be solved because HDMI is adding new communication channels that will allow TV and cable and receiver control, but it isn’t even close to being all there yet.

So even though Apple’s cool core of voice control and asking to see a show rather than a channel could go into a standalone box, Apple feels it has to actually make the TV so things can be tightly integrated.

But your choice of TV will be very limited. Competition, weak but everywhere, will already be out there, snapping up the available customers before they have a chance to see the better product. And, Steve won’t be there to put the last minute, ultra-important final touches on the product.

Maybe Apple, after a while, could license manufacturers to make their new TVs in a variety of screen technologies. But could you see Apple going the licensing route? More likely they will bring out a new size each year, something like that, while other manufactures flood the market with half as good a product at half the price – a strategy we are currently seeing in the tablet market. But the TV is a commodity. The competition could hurt this time.