By Philip Elmer-DeWitt
May 14, 2012

FORTUNE — Although there is no shortage of iTV speculation — thanks to rumor sites like Taipei-based DigiTimes — and plenty of Apple (AAPL) analysts ready to calculate to the penny how much an Apple-branded TV set would add to the company’s bottom line, some experts have started to back away from what was once seen as an inevitablity.

In December, Richard Gardner, formerly of Citigroup, warned that “Apple has not even defined specs yet.” In February, Barclays’ Ben Reitzes suggested that Apple was focused more on lining up TV content partnerships than on the production of a TV set.

Now Pacific Crest’s Andy Hargreaves has poured what may be the coldest water yet on the idea. In a note to clients issued Monday, he makes two points: (I quote)

  • Investment in Apple television makes little sense without a unique TV content offering. An Apple television could drive substantial profitability if it helped Apple capture service provider profits. However, we do not expect U.S. broadcast or cable networks to provide Apple content if it risks cannibalizing existing revenue, which makes a unique Apple service and an Apple television unlikely.
  • An Apple television would be a terrible use of retail space relative to iPhone, iPad or the Apple TV set-top box. A 46” Apple television would likely generate less than 1/200th the gross profit per cubic foot as an iPhone at retail, and less than 1/50th the gross profit per cubic foot of an iPad. We believe this is critical given the limited inventory space at many Apple and partner stores.

As it happens, I agree with Hargreaves (see here), although he goes on to say that Apple is more likely to be building an iPad mini. That one I’ll believe when I see it.

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