Terry Gou

Anatomy of an iTV rumor

May 14, 2012: 8:16 AM ET

The latest "confirmation" that Apple is building a TV set turns out to be another soufflé

Via Techmeme

FORTUNE -- It is perhaps a measure of how badly broken today's commercial TV viewing experience is -- the cookie-cutter sitcoms, the ridiculous reality shows, the ever-shifting channel line-ups, the relentless, merciless commercial breaks -- that the tech press is so desperate to believe even the slimmest rumor that Apple (AAPL) is getting ready to solve all that by building its own television set.

Take, for example, last week's report that Hon Hai chairman Terry Gou announced at a press conference in Shanghai that his Foxconn subsidiary was "making preparations for iTV."

By Friday the report had spawned dozens of headlines. A sample:

What none of these reporters mentioned (or apparently bothered to consider) is that Gou -- whose factories assemble 40% of the world's electronic devices -- is one of the industry's most secretive executives. He is privy to the future product plans of the most valuable electronics brands -- not just Apple, but also Sony (SNE), Microsoft (MSFT), Hewlett-Packard (HPQ) and the rest. He is trusted by his business partners because he never leaks their secrets.

Terry Gou. Photo via M.I.C. Gadget

Given how jealously Apple guards its own secrets, and how relentlessly it pursues those who spill them, what are the chances that Gou would say anything -- ever -- about an unannounced Apple product, real or imagined?

I'd say, nil.

So what was the source for this latest iTV story?

It was single item in China Daily -- an English-language newspaper based in Beijing. The dateline is Shanghai. The byline is Gao Changxin. The headline reads: "Foxconn plans renewed shift into distribution."

After 15 paragraphs about Gou's remarks at the groundbreaking for Hon Hai's new Shanghai headquarters and his company's plans to expand distribution in mainland China, the China Daily story tosses in -- almost as an afterthought -- this sentence:

"Gou said Foxconn is making preparations for iTV, Apple Inc's rumored upcoming high-definition television, although development or manufacturing has yet to begin."

Talk about burying the lead!

If Gou really said this, it would be -- for all the reasons stated above -- very big news.

So how is it that none of the other reporters covering the event heard it? Not Reuters' John Ruwitch. Not Bloomberg's Tim Culpin. Not the AP's Elaine Kurtenbach.

It is possible that the China Daily reporter misheard or misunderstood Gou's remarks? Or that his report was mistranslated? Or that a desk editor or rewrite person mangled it?

We've asked Gao Changxin to review his notes and tell us exactly what Gou said. He has yet to respond to our several requests. See Update 2 below.

For now, the Terry Gou iTV story remains what one of my editors at Time Magazine used to call "a soufflé." Kick it a few times and it collapses.

Meanwhile the tech press has moved on to the latest "confirmation" that Apple is getting into the TV-set business: A rumor that the company is about to buy Loewe, a German distributor of slim HDTVs and integrated, Apple-friendly audio equipment. A Loewe spokesperson told a German blog Sunday that there was "absolutely nothing to" the rumor, but that didn't stop the tech press from piling onto the story, or Loewe's stock from jumping 30% Monday morning on the Frankfurt exchange.

For our take on the whole iTV phenomenon, see Tell me again: Why do we think Apple will build a TV set?

Update: A Foxconn spokesperson contacted The Next Web with the following statement:

In remarks at a media briefing during the groundbreaking of Foxconn's new China headquarters in Shanghai on May 10, Terry Gou, Foxconn's Chief Executive Officer, made it very clear that he would neither confirm nor speculate about Foxconn's involvement in the production of any product for any customer because Foxconn's policy is not to comment on any customers or their products.

At no time did he confirm that Foxconn was in development or manufacturing stages for any product for any of its customers.  He did say that  Foxconn is always prepared to meet the manufacturing needs of customers should they determine that they wish to work with Foxconn in the production of any of their products.   Any reports that Foxconn confirmed that it is preparing to produce a specific product for any customer are not accurate.

That nails it.

UPDATE 2: Gao sent us an audio recording of Gou's remarks with a pointer to the passage in question. I had someone who speaks Chinese listen to it. Here's his report: "Gou didn't specifically mention making TV for Apple  but they are going to go into building TV business and how they will able to become one of the top players. He gave a example how cell phone changed from the big one to now the tiny handsets. The same thing will be happening to TV right now."

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