6 ms·

Apple and the TV industry

88 points by jeffmiller 15y ago

neworbit 15y ago
There's a more important constraint here: people change out their small consumer electronics MUCH faster. They buy new phones every year or two, arguably as fast as Apple puts them out. Same was largely true for iPods. They don't replace their TVs very often.
- stcredzero 15y ago
  How often do people buy set-top boxes in the $99-$250 range?
  - benologist 15y ago
    As often as they break or want and can afford a bigger one. I'd need a pretty compelling reason to buy a new TV even every five years.
    - edash 15y ago
      How many Walkman's or Discman's did you buy before the iPod came out? The market for portable music devices went up exponentially from the 90's to the mid-2000's when the iPod achieved mainstream status. I bought two iPods in three years before the iPhone made 'em useless. Consumer behavior isn't set in stone. Source: http://www.in-stat.com/press.asp?ID=1366&sku=IN0502148ID http://www.in-stat.com/press.asp?ID=1366&sku=IN0502148ID
      - te_chris 15y ago
        Off topic, but the iPhone has done anything but make my iPod Classic useless. It's shown me what a brilliant and useful device my Classic is, that I can hold 120gigs of music in my pocket at all times. You have to be a music fan to really appreciate this, but for me I like that I have a smart phone and an iPod and, if my classic broke, I would certainly buy another one.
    - stcredzero 15y ago
      Re-read my comment. It's set-top box not TV.
      - benologist 15y ago
        Oops, my bad. The rest of us were discussion televisions, not set-top boxes!
  - jonhendry 15y ago
    How many people have multiple game consoles? Quite a few, I'd imagine.
stcredzero 15y ago
The mistake analysts made about the iPhone was to assume the current industry structure would be sustained after Apple’s entry. I’d be wary of making the same assumption about the TV industry. The big idea in this post: Sometimes you can't judge the viability of a truly disruptive actor by taking into account a current industry's structure, because a truly disruptive actor will change the structure!
- kenjackson 15y ago
  Did the iPhone change the industry structure by much? We still have two year contracts in the US. The price of plans seems to be increasing still. You still can't take a phone from one carrier to the other (at least not easily). What did Apple change? Updates directly from Apple? As others have noted other phones did that before, including Nokia. Buying phones at the Apple Store? Radio Shack and Best Buy have long had huge sales centers for phones. An app store? Those long existed to, although generally carrier provided or via 3rd parties (like Handango). So Apple provided their own app store. That might be new, but it's hardly industry structure changing. What Apple did show is that if you make a good enough product, people will suffer through worse service. With that said there is a HUGE opportunity here for Apple. Apple has shown it knows how to work with Samsung and the likes to make great displays and hardware. I wouldn't be at all surprised to see Apple ship the highest quality display available. Plus with their volume on phones/tablets they can probably use pressure to drive prices down on for a TV. Next they integrate iOS into the TV. Then offer a subscription to iTunes content and AirPlay support. The cable provider is now completely out of the picture. They could charge $2500 for this TV and they'd sell 1M in the first week. 1M in TV sales for a single model, I'd imagine, would be a blockbuster. In many ways I think this industry would be easier to take than phones.
  - davidedicillo 15y ago
    Few things I can think on top of my mind: - You can have a complete new feature without changing your phone - You don't depend on your carrier in order to buy applications - No crapware (sorry this advantage is available only on non-open devices) - They opened the mobile development industry to indie and small developers
rm445 15y ago
Interesting article. As I read it, I supposed that the conclusion would be that the iOS ecosystem would be Apple's disruptive advantage in the set-top box market. Instead, he concludes that Apple might make a disruptive television. It's interesting - displays are already vital to their other products so it's not a big stretch.
pieter 15y ago
He misss a fourth option: Apple replacing the existing top-box with their own, using TV over IP. Might not be the time for that yet, especially with the horrible broadband Market in the US, but once TV is a commodity you get over the Internet just like music, Apple might want to give it a try.
- masklinn 15y ago
  No, that is the very issue outlined in the AllThingsD Jobs quote (third quote block): > The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. Competing with free is hard, and replacing existing top-box means replacing free operator-provided set-top boxes. Replacing top-box is what AppleTV does, and Jobs very much says it won't achieve mass-acceptance ever, hence his conclusion that: > I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby.
  - davidedicillo 15y ago
    Right, there were no such thing as free phones on the market when the iPhone came out...
  - philwelch 15y ago
    I think the idea is also to replace the service that gives you the free set top box. Given how savvy users are already replacing their cable TV subscriptions with Hulu and Netflix, I see a lot of room for an easy, well-built, integrated service like this.
  - pieter 15y ago
    I don't think the AppleTV replaces any top-box right now, nor is it meant to do so. As long as you can't watch live tv with it, almost no-one will use it instead of their cable subscription. That said, I don't really see problems with giving away the AppleTV for free with a one or two-year subscription; the iPhone is already available for free on contract in a lot of countries, and the AppleTV is a lot cheaper to produce.
dstein 15y ago
2) integrating into other TVs, or 3) Apple creating its own TV I think he missed the in-between option here. Apple could partner up with a single manufacturer (Samsung) to produce an Apple branded TV with their own specs and the AppleTV STB built-in. I think this is the most likely possibility.
- masklinn 15y ago
  For all intents and purposes, that's 3. Unless you're advocating some kind of hybrid bastard product à la ROKR. And I don't see Apple making that mistake again.
- ja2ke 15y ago
  Even if Apple did that, I imagine they wouldn't share co-branding prominently on the packaging/marketing, which would make it #3. How many devices have you seen in the last decade which include an Apple logo AND another manufacturer's logo? I can think of one: the Apple/Nike+ http://www.apple.com/ipod/nike/ http://www.apple.com/ipod/nike/ . The Apple logo and the Nike swoosh are cited as two of the most recognized logos in the world. I suspect that's about the only caliber of partnered branding Jobs would allow on an Apple product at this point.
  - ugh 15y ago
    There was that strange HP iPod (http://en.wikipedia.org/wiki/IPod%2BHP http://en.wikipedia.org/wiki/IPod%2BHP) which, to this day, weirds me out. (It's also ancient history at this point in time. Apple sold only one gadget back then and it didn't run iOS. It's astonishing how Apple changed in the last five years.) You never know what Apple might do but I think you are very correct when you say that Apple usually doesn't do co-branding. Edit: Another point I just thought of and wanted to add: Neither Nike+ nor the HP iPod are or were ever mission critical for Apple. Nike+ is nice to have but if it disappeared from the face of the Earth tomorrow Apple wouldn't really be any worse off. Co-branding is apperantly something Apple does when the products have already become stupendously succesful. (Nike+ was added to iPods at their peak.)
  - slashclee 15y ago
acangiano 15y ago
There is no doubt in my mind that Apple will end up disrupting the TV industry as well. Generally speaking I prefer the idea of an external box that can be easily replaced and updated. However, I'm sure Apple will manage to provide regular firmware and iOS updates to their all-in-one TVs, so the benefits of the external box may become quite marginal for most people.
- easyfrag 15y ago
  I think Apple TV is already in the process of disrupting TV, if I recall disruption theory correctly the disruptor is not quite as good as the current status quo. Let's look at apple tv compared to a traditional cable box: Netflix is pretty good but doesn't have the same level of "appointment" or "water cooler" shows as cable. Cable is far superior with live sports, apple tv just has MLB streaming with probably the NBA and NHL soon to follow. Already for some audiences that might be enough to kill the cable bill entirely or (more likely) to reduce the package they have. Throw in the fact that it can also play the stuff that's on the your iPhone or iPod, has built in pay per view mechanism, and a prettier interface and I think you might have some freaked out cable/ satellite providers. Apple TV is definitely not as good as cable but it's getting close to being good enough.
  - r00fus 15y ago
    AppleTV hasn't replaced CableTV for me, but it sure has replaced on-demand-movies. Netflix streaming is great, but it usually doesn't have the best and latest movies. We've used the AppleTV rentals several times in the past few months where we might have instead watched Cable on-demand.
- jonhendry 15y ago
  They aren't even updating the older Intel-based Apple TV set-top boxes.
melvinram 15y ago
OP's points are valid but it ignores the core of Apple's strategy whenever they've had a home-run: getting partners to do things they would almost never do. They might be able to do the same with TV, but they might not choose to partner with cable companies. If they are indeed building an iTV, they might partner with the major networks... or maybe just one to start... ABC. The networks might be motivated by dropping revenues from their current channels. Apple might promise them an AdSense style platform for selling TV ads. They would now be able to monetize content that very niche audience would be interested in. If they promised them the same 70/30 split or higher, it might be enough to get the networks to take the risk of pissing off their local affiliates. I don't think they currently get that high of a split from their affiliates. There are a number of ways they could potentially get the networks on board (though it'll be super difficult.) Regardless, I think the thing that they have to crack is the demand side. How do they make a TV that is so much better than current TVs that it redefines the category and get's people to give up their current TVs. I have an awesome Pioneer plasma screen from 3 years ago. It's going strong and I see no good reason to throw out the $$$$ that I put out for it. However, if anyone can make me do, it's Apple but it would have to be a fantastic product. Part of the mix might be incorporating the gaming advantage that iPhone and iPad has benefited from. If they just used their other iOS devices as controllers & remotes, they would have a gaming platform that could rival XBOX & Playstation. The only thing it would need to match it is a konnect style device. Who knows if they'll go there with the first few versions. They also would need to offer a new modality to TV that really changes the game. I would hope that at the least, they would offer a hulu + netflix style service.
- jonhendry 15y ago
  They won't do a TV. Replacement cycles on TVs are long, especially now that we're unlikely to see a persuasive tech shift that would drive upgrades. Current 1920 HDTV screens are going to be 'good enough' for quite a while. If Apple released a TV, they'd soon find themselves with a large installed base of outdated hardware and customers in no hurry to upgrade because the main functionality is still entirely adequate. It's to Apple's advantage to sell easily-replaced $99 external boxes that attach to whatever TV the consumer already owns. In one or two years, the consumer can replace it with the latest Apple product, with its faster CPU and GPU, additional storage, and new features, without too much pain. People just aren't going to want to replace 60" TVs as often as they replace a cell phone or a laptop or a game console.
guygurari 15y ago
I like Marco Arment's take on this [1]. He doesn't think Apple will release an HDTV, citing the following problems. 1. Consumers don't upgrade their TV as often as they do their laptops, cell phones, and other gadgets. 2. Apple can't make an all-in-one TV. HDTV's need to interact with receivers, equipment supplied by the cable operators, blu-ray players, game consoles, etc. Apple usually prefers to keep such interactions to a minimum. 3. TV's require service at the customer's home, which Apple isn't currently geared for. He also offers some points I disagree with. 1. Apple serves the high-end market in order to have high margins. How big is the high-end TV market? I think the same could've been said about the smartphone market prior to the iPhone. As Apple showed, high-end does not equate high prices. Get the price right on a quality product and you can capture a significant share of the market. Better yet, disrupt the market by re-imagining the product (think capacitive touch screens). 2. Retail TV stores need a large display area, which isn't a good fit with Apple's existing stores. No need for a large display area if you're selling just one model. [1] http://www.marco.org/2011/04/16/rumored-apple-hdtv http://www.marco.org/2011/04/16/rumored-apple-hdtv
atacrawl 15y ago
I think Netflix and Hulu (along with the internet at large) have already disrupted the TV industry. Cable painted themselves into a corner -- they leveraged their monopoly of the home entertainment dollar by adding more and more channels that people didn't necessarily want under the guise of "choice," then subsidized those unwanted channels by raising the monthly price. That worked until technology caught up and the internet became a viable distributor of content. Consumers are wising up to this, and cable is shedding half a million subscribers a quarter. I think the best way for Apple (and others) to really put their boots on cable's neck is either to poach content or compete on content. It'll be interesting to see how House of Cards does on Netflix, for instance.
replicatorblog 15y ago
There is one crucial aspect of the TV experience this argument leaves out. Content - An Apple television would present some cool options for new apps and games, but the lean back experience would be no different than with a current TV. People want their Madmen, football, Nascar, Walking Dead, etc. and you will need to buy that through cable companies (for now). If Apple makes a TV it will look awesome and have some neat tricks, but it will be a "Dumb Screen" for whatever comes through the set top box. That seems like a losing solution for Apple. I think a more likely scenario is that Apple buys a Cable provider like Comcast and replaces the horrible set top box with an Apple version. Why? Apple's huge cash position - Apple has more than $50B in free cash and are adding ~$10B a quarter. They have made repeated statements about keeping that money available for one or more major strategic investments. They could conceivably have enough money to buy Comcast by the end of this year. Why this works: - Fits their vertically integrated model perfectly. Now Apple will own the customer experience from end to end. - Creates a wedge that will force other carriers to offer an Apple set top box. - Forces all the content providers to play ball with Apple. If Apple owns the pipes the content co's will lose a lot of negotiating power. - It is a great high margin business, well suited to the Tim Cook era where device innovation might be slower. - It is a hedge against Net Neutrality. If the cable co's get their way it could negatively impact the Apple UX, especially for iPad. In this scenario Apple can take on a high margin business with a host of barriers to entry and milk it while they reimagine what the TV experience should be for the next 20 years. I have no doubt that we will see a beautiful aluminum TV made by Apple at some point, but if they don't figure out the infrastructure foundation first it will not work.
- melvinram 15y ago
  I like it but I'm not sure it's likely. They are very different cultures. With that said, if it did happen, maybe I'll like Comcast/Applecast again.
- jonursenbach 15y ago
  Apple might have enough money to buy Comcast, but would that ever pass regulation?
  - 15y ago
RomP 15y ago
I always thought that what Apple does best is taking a cumbersome consumer device and making it simple. E.g. iPhone replaced 4 or more devices with one (phone, iPod, internet+mail client and GPS, at the very least, and that happened before the AppStore opened). I really don't think that people at Apple sit around the table and think in terms of vertically integrated models, platforms, monetizing and all that other high-level stuff. I bet they think about user experience and do what needs to be done to achieve it. Integration models, platforms, partners, etc. come in next, they are secondary in the big schema of things. From the user perspective, people need simple access to the following types of content: * real-time (think ESPN, Speed Channel and breaking news) * near real-time content (talk shows, nightly news, first-run TV shows) * archived content (moves on DVDs) The archived content problem is solved by Netflix. The near-real-time problem is solved by Hulu (some networks, like HBO and Showtime are not there yet but will be once paid subscription becomes relevantly popular). The real-time problem is not solved -- flash-based players on news sites do not count. Apple might be able to to the third one, the way the newspapers are now published on the iPod. In my view the opportunity is to bring all 3 types of content into one box, under one UI and wrap it into the nice user experience. Add IP-only delivery and a-la-carte subscription (e.g. I want monthly pass to 3 shows from Showtime and one show from HBO, but not the whole network), and users will ditch their $150/month settop boxes in droves.
nostromo 15y ago
Apple today is one of the biggest gaming companies out there (because of the iPhone and iPad)... But they don't really act like it. You see it all the time -- they push enterprise work apps on their devices, even though the vast majority of Apps purchased are games, games and more games. Think about all of the Wiis and XBoxes out there -- those people would gladly buy an iTV for their existing TV if Apple would embrace the gaming market. Integration with your iPhone and iPad and computer would give amazing opportunities -- much more than the Wiimote and maybe even Kinect. This should be their entry into the TV space. I don't know why they don't see this -- probably because their senior management is too old to take the gaming space seriously. And moving the gaming market away from PCs / XBox / Nintendo and to Mac and iOS -- it could have great ramifications for several Apple lines of business.
- 2arrs2ells 15y ago
  Anyone remember the Pippin? Apple released a (terrible) gaming console back in '95/'96. I don't think prior mistakes (or general ignorance of the games market) are the reason there aren't apps on the Apple TV now. Maybe it's a hardware thing (A4 can't drive games at HD resolution)? Maybe it's a chicken/egg issue (not enough Apple TVs to warrant developer attention)?
  - deleted 15y ago
    [deleted]
  - i386 15y ago
    Remember that Apple at this time was a company that made terrible computers and handheld devices too (Remember the Performa and the Newton?) Doing games on the AppleTV wouldn't be that unattractive for Apple, consumers or developers: 1) The asking price of the Apple TV is very competitive ($129AUD last time I checked) compared to most consoles on the market. You can buy three or four of them for the price of a XBox 360, Playstation 3 or a Wii. 2) Apple currently market the iPod Touch as a portable gaming system and there are a lot of children/teenagers who have bought one because the games are cheap and addictive - theres no need to go to the store or use their parents credit card to purchase. 3) The amount of hit games first sold on the AppStore is testament to the amount of work Apple have done to make their platform an attractive target to game developers. 4) The current Apple TV uses the same SoC that the iPad currently does. While I am no hardware expert, I'd imagine that later revisions of this SoC would be at least as powerful as Nintendo's Wii. While the Wii is "underpowered" compared to the PS3 or XBox 360 it has been a roaring success because the content, not the technical capability, has drawn in casual gamers.
tienshiao 15y ago
I think the iPad could be Apple's set top box. You can see pieces of it in place already. - content: The recent apps from TimeWarner and Comcast. iTunes is obviously another source. Games are another source of content. - AirPlay: Extending AirPlay to support video out doesn't seem to farfetched. This would only really be needed for non-video applications (ie: games). - Integration with TVs: Presently, you need an adaptor (the AppleTV), but it would not be farfetched to see the AirPlay functionality built into the TVs (like the Samsung TVs with wifi and apps already). There is precedence for this on the music streaming side with AirPlay.
- wowamit 15y ago
  Re: "Integration with TVs" - I doubt Apple would depend on a 3rd party for a core piece of the overall solution. So iPads as set top box is pretty much farfetched.
panacea 15y ago
"I am not citing these analysts to mock them. Hindsight is 20/20..." John "Claim Chowder" Gruber, could learn a thing or two from Mr Dixon.
elvirs 15y ago
I think another major problem with tv is that it has too much content which is hard to navigate in and it is not personalized. when I browse through channels there are so many things that I would never watch but today I have to be exposed to it and decide if its worth watching or should I move on. If my tv or the remote knew my watching preferences it would walk me among the channels showing things that I would prefer to watch at that moment. I am working on a project that converts your phone (with internet) to a tv remote and enables a personalized tv experience. I hope I can make it right.
tuhin 15y ago
Perhaps the Apple entertainment TV is already out there in the form of Macs, iPads and iPhones. Maybe it is just me thinking stupidly but from the way I see, the iTunes is the new Apple set top box. Certainly the Airplay and other features they are adding seem to point that way. What if they are able to have cheaper subscription rates for shows (entire season, maybe?), entire NFL season etc. I chose what I watch and when I watch and the experience can hardly get any better. Of course I am not saying that iTunes is at its peak of innovation, but just saying that perhaps Apple is not bringing innovation to TV but bringing TV to a host of innovative devices. For me every bit of TV watching happens online and I would like to believe that that is the trend the industry is witnessing. What else defines YouTube buying rights for streaming live IPL matches for India, a country where TV sets definitely outshine the web streamers.

88 points by jeffmiller 15y ago

There's a more important constraint here: people change out their small consumer electronics MUCH faster. They buy new phones every year or two, arguably as fast as Apple puts them out. Same was largely true for iPods. They don't replace their TVs very often.

stcredzero 15y ago
How often do people buy set-top boxes in the $99-$250 range?
- benologist 15y ago
  As often as they break or want and can afford a bigger one. I'd need a pretty compelling reason to buy a new TV even every five years.
  - edash 15y ago
    How many Walkman's or Discman's did you buy before the iPod came out? The market for portable music devices went up exponentially from the 90's to the mid-2000's when the iPod achieved mainstream status. I bought two iPods in three years before the iPhone made 'em useless. Consumer behavior isn't set in stone. Source: http://www.in-stat.com/press.asp?ID=1366&sku=IN0502148ID http://www.in-stat.com/press.asp?ID=1366&sku=IN0502148ID
    - te_chris 15y ago
      Off topic, but the iPhone has done anything but make my iPod Classic useless. It's shown me what a brilliant and useful device my Classic is, that I can hold 120gigs of music in my pocket at all times. You have to be a music fan to really appreciate this, but for me I like that I have a smart phone and an iPod and, if my classic broke, I would certainly buy another one.
  - stcredzero 15y ago
    Re-read my comment. It's set-top box not TV.
    - benologist 15y ago
      Oops, my bad. The rest of us were discussion televisions, not set-top boxes!
- jonhendry 15y ago
  How many people have multiple game consoles? Quite a few, I'd imagine.

stcredzero 15y ago

The mistake analysts made about the iPhone was to assume the current industry structure would be sustained after Apple’s entry. I’d be wary of making the same assumption about the TV industry. The big idea in this post: Sometimes you can't judge the viability of a truly disruptive actor by taking into account a current industry's structure, because a truly disruptive actor will change the structure!

kenjackson 15y ago
Did the iPhone change the industry structure by much? We still have two year contracts in the US. The price of plans seems to be increasing still. You still can't take a phone from one carrier to the other (at least not easily). What did Apple change? Updates directly from Apple? As others have noted other phones did that before, including Nokia. Buying phones at the Apple Store? Radio Shack and Best Buy have long had huge sales centers for phones. An app store? Those long existed to, although generally carrier provided or via 3rd parties (like Handango). So Apple provided their own app store. That might be new, but it's hardly industry structure changing. What Apple did show is that if you make a good enough product, people will suffer through worse service. With that said there is a HUGE opportunity here for Apple. Apple has shown it knows how to work with Samsung and the likes to make great displays and hardware. I wouldn't be at all surprised to see Apple ship the highest quality display available. Plus with their volume on phones/tablets they can probably use pressure to drive prices down on for a TV. Next they integrate iOS into the TV. Then offer a subscription to iTunes content and AirPlay support. The cable provider is now completely out of the picture. They could charge $2500 for this TV and they'd sell 1M in the first week. 1M in TV sales for a single model, I'd imagine, would be a blockbuster. In many ways I think this industry would be easier to take than phones.
- davidedicillo 15y ago
  Few things I can think on top of my mind: - You can have a complete new feature without changing your phone - You don't depend on your carrier in order to buy applications - No crapware (sorry this advantage is available only on non-open devices) - They opened the mobile development industry to indie and small developers

rm445 15y ago

Interesting article. As I read it, I supposed that the conclusion would be that the iOS ecosystem would be Apple's disruptive advantage in the set-top box market. Instead, he concludes that Apple might make a disruptive television. It's interesting - displays are already vital to their other products so it's not a big stretch.

pieter 15y ago

He misss a fourth option: Apple replacing the existing top-box with their own, using TV over IP. Might not be the time for that yet, especially with the horrible broadband Market in the US, but once TV is a commodity you get over the Internet just like music, Apple might want to give it a try.

masklinn 15y ago
No, that is the very issue outlined in the AllThingsD Jobs quote (third quote block): > The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. Competing with free is hard, and replacing existing top-box means replacing free operator-provided set-top boxes. Replacing top-box is what AppleTV does, and Jobs very much says it won't achieve mass-acceptance ever, hence his conclusion that: > I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby.
- davidedicillo 15y ago
  Right, there were no such thing as free phones on the market when the iPhone came out...
- philwelch 15y ago
  I think the idea is also to replace the service that gives you the free set top box. Given how savvy users are already replacing their cable TV subscriptions with Hulu and Netflix, I see a lot of room for an easy, well-built, integrated service like this.
- pieter 15y ago
  I don't think the AppleTV replaces any top-box right now, nor is it meant to do so. As long as you can't watch live tv with it, almost no-one will use it instead of their cable subscription. That said, I don't really see problems with giving away the AppleTV for free with a one or two-year subscription; the iPhone is already available for free on contract in a lot of countries, and the AppleTV is a lot cheaper to produce.

dstein 15y ago

2) integrating into other TVs, or 3) Apple creating its own TV I think he missed the in-between option here. Apple could partner up with a single manufacturer (Samsung) to produce an Apple branded TV with their own specs and the AppleTV STB built-in. I think this is the most likely possibility.

masklinn 15y ago
For all intents and purposes, that's 3. Unless you're advocating some kind of hybrid bastard product à la ROKR. And I don't see Apple making that mistake again.
ja2ke 15y ago
Even if Apple did that, I imagine they wouldn't share co-branding prominently on the packaging/marketing, which would make it #3. How many devices have you seen in the last decade which include an Apple logo AND another manufacturer's logo? I can think of one: the Apple/Nike+ http://www.apple.com/ipod/nike/ http://www.apple.com/ipod/nike/ . The Apple logo and the Nike swoosh are cited as two of the most recognized logos in the world. I suspect that's about the only caliber of partnered branding Jobs would allow on an Apple product at this point.
- ugh 15y ago
  There was that strange HP iPod (http://en.wikipedia.org/wiki/IPod%2BHP http://en.wikipedia.org/wiki/IPod%2BHP) which, to this day, weirds me out. (It's also ancient history at this point in time. Apple sold only one gadget back then and it didn't run iOS. It's astonishing how Apple changed in the last five years.) You never know what Apple might do but I think you are very correct when you say that Apple usually doesn't do co-branding. Edit: Another point I just thought of and wanted to add: Neither Nike+ nor the HP iPod are or were ever mission critical for Apple. Nike+ is nice to have but if it disappeared from the face of the Earth tomorrow Apple wouldn't really be any worse off. Co-branding is apperantly something Apple does when the products have already become stupendously succesful. (Nike+ was added to iPods at their peak.)
- slashclee 15y ago

acangiano 15y ago

There is no doubt in my mind that Apple will end up disrupting the TV industry as well. Generally speaking I prefer the idea of an external box that can be easily replaced and updated. However, I'm sure Apple will manage to provide regular firmware and iOS updates to their all-in-one TVs, so the benefits of the external box may become quite marginal for most people.

easyfrag 15y ago
I think Apple TV is already in the process of disrupting TV, if I recall disruption theory correctly the disruptor is not quite as good as the current status quo. Let's look at apple tv compared to a traditional cable box: Netflix is pretty good but doesn't have the same level of "appointment" or "water cooler" shows as cable. Cable is far superior with live sports, apple tv just has MLB streaming with probably the NBA and NHL soon to follow. Already for some audiences that might be enough to kill the cable bill entirely or (more likely) to reduce the package they have. Throw in the fact that it can also play the stuff that's on the your iPhone or iPod, has built in pay per view mechanism, and a prettier interface and I think you might have some freaked out cable/ satellite providers. Apple TV is definitely not as good as cable but it's getting close to being good enough.
- r00fus 15y ago
  AppleTV hasn't replaced CableTV for me, but it sure has replaced on-demand-movies. Netflix streaming is great, but it usually doesn't have the best and latest movies. We've used the AppleTV rentals several times in the past few months where we might have instead watched Cable on-demand.
jonhendry 15y ago
They aren't even updating the older Intel-based Apple TV set-top boxes.

melvinram 15y ago

OP's points are valid but it ignores the core of Apple's strategy whenever they've had a home-run: getting partners to do things they would almost never do. They might be able to do the same with TV, but they might not choose to partner with cable companies. If they are indeed building an iTV, they might partner with the major networks... or maybe just one to start... ABC. The networks might be motivated by dropping revenues from their current channels. Apple might promise them an AdSense style platform for selling TV ads. They would now be able to monetize content that very niche audience would be interested in. If they promised them the same 70/30 split or higher, it might be enough to get the networks to take the risk of pissing off their local affiliates. I don't think they currently get that high of a split from their affiliates. There are a number of ways they could potentially get the networks on board (though it'll be super difficult.) Regardless, I think the thing that they have to crack is the demand side. How do they make a TV that is so much better than current TVs that it redefines the category and get's people to give up their current TVs. I have an awesome Pioneer plasma screen from 3 years ago. It's going strong and I see no good reason to throw out the $$$$ that I put out for it. However, if anyone can make me do, it's Apple but it would have to be a fantastic product. Part of the mix might be incorporating the gaming advantage that iPhone and iPad has benefited from. If they just used their other iOS devices as controllers & remotes, they would have a gaming platform that could rival XBOX & Playstation. The only thing it would need to match it is a konnect style device. Who knows if they'll go there with the first few versions. They also would need to offer a new modality to TV that really changes the game. I would hope that at the least, they would offer a hulu + netflix style service.

jonhendry 15y ago
They won't do a TV. Replacement cycles on TVs are long, especially now that we're unlikely to see a persuasive tech shift that would drive upgrades. Current 1920 HDTV screens are going to be 'good enough' for quite a while. If Apple released a TV, they'd soon find themselves with a large installed base of outdated hardware and customers in no hurry to upgrade because the main functionality is still entirely adequate. It's to Apple's advantage to sell easily-replaced $99 external boxes that attach to whatever TV the consumer already owns. In one or two years, the consumer can replace it with the latest Apple product, with its faster CPU and GPU, additional storage, and new features, without too much pain. People just aren't going to want to replace 60" TVs as often as they replace a cell phone or a laptop or a game console.

guygurari 15y ago

I like Marco Arment's take on this [1]. He doesn't think Apple will release an HDTV, citing the following problems. 1. Consumers don't upgrade their TV as often as they do their laptops, cell phones, and other gadgets. 2. Apple can't make an all-in-one TV. HDTV's need to interact with receivers, equipment supplied by the cable operators, blu-ray players, game consoles, etc. Apple usually prefers to keep such interactions to a minimum. 3. TV's require service at the customer's home, which Apple isn't currently geared for. He also offers some points I disagree with. 1. Apple serves the high-end market in order to have high margins. How big is the high-end TV market? I think the same could've been said about the smartphone market prior to the iPhone. As Apple showed, high-end does not equate high prices. Get the price right on a quality product and you can capture a significant share of the market. Better yet, disrupt the market by re-imagining the product (think capacitive touch screens). 2. Retail TV stores need a large display area, which isn't a good fit with Apple's existing stores. No need for a large display area if you're selling just one model. [1] http://www.marco.org/2011/04/16/rumored-apple-hdtv http://www.marco.org/2011/04/16/rumored-apple-hdtv

atacrawl 15y ago

I think Netflix and Hulu (along with the internet at large) have already disrupted the TV industry. Cable painted themselves into a corner -- they leveraged their monopoly of the home entertainment dollar by adding more and more channels that people didn't necessarily want under the guise of "choice," then subsidized those unwanted channels by raising the monthly price. That worked until technology caught up and the internet became a viable distributor of content. Consumers are wising up to this, and cable is shedding half a million subscribers a quarter. I think the best way for Apple (and others) to really put their boots on cable's neck is either to poach content or compete on content. It'll be interesting to see how House of Cards does on Netflix, for instance.

replicatorblog 15y ago

There is one crucial aspect of the TV experience this argument leaves out. Content - An Apple television would present some cool options for new apps and games, but the lean back experience would be no different than with a current TV. People want their Madmen, football, Nascar, Walking Dead, etc. and you will need to buy that through cable companies (for now). If Apple makes a TV it will look awesome and have some neat tricks, but it will be a "Dumb Screen" for whatever comes through the set top box. That seems like a losing solution for Apple. I think a more likely scenario is that Apple buys a Cable provider like Comcast and replaces the horrible set top box with an Apple version. Why? Apple's huge cash position - Apple has more than $50B in free cash and are adding ~$10B a quarter. They have made repeated statements about keeping that money available for one or more major strategic investments. They could conceivably have enough money to buy Comcast by the end of this year. Why this works: - Fits their vertically integrated model perfectly. Now Apple will own the customer experience from end to end. - Creates a wedge that will force other carriers to offer an Apple set top box. - Forces all the content providers to play ball with Apple. If Apple owns the pipes the content co's will lose a lot of negotiating power. - It is a great high margin business, well suited to the Tim Cook era where device innovation might be slower. - It is a hedge against Net Neutrality. If the cable co's get their way it could negatively impact the Apple UX, especially for iPad. In this scenario Apple can take on a high margin business with a host of barriers to entry and milk it while they reimagine what the TV experience should be for the next 20 years. I have no doubt that we will see a beautiful aluminum TV made by Apple at some point, but if they don't figure out the infrastructure foundation first it will not work.

melvinram 15y ago
I like it but I'm not sure it's likely. They are very different cultures. With that said, if it did happen, maybe I'll like Comcast/Applecast again.
jonursenbach 15y ago
Apple might have enough money to buy Comcast, but would that ever pass regulation?
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RomP 15y ago

I always thought that what Apple does best is taking a cumbersome consumer device and making it simple. E.g. iPhone replaced 4 or more devices with one (phone, iPod, internet+mail client and GPS, at the very least, and that happened before the AppStore opened). I really don't think that people at Apple sit around the table and think in terms of vertically integrated models, platforms, monetizing and all that other high-level stuff. I bet they think about user experience and do what needs to be done to achieve it. Integration models, platforms, partners, etc. come in next, they are secondary in the big schema of things. From the user perspective, people need simple access to the following types of content: * real-time (think ESPN, Speed Channel and breaking news) * near real-time content (talk shows, nightly news, first-run TV shows) * archived content (moves on DVDs) The archived content problem is solved by Netflix. The near-real-time problem is solved by Hulu (some networks, like HBO and Showtime are not there yet but will be once paid subscription becomes relevantly popular). The real-time problem is not solved -- flash-based players on news sites do not count. Apple might be able to to the third one, the way the newspapers are now published on the iPod. In my view the opportunity is to bring all 3 types of content into one box, under one UI and wrap it into the nice user experience. Add IP-only delivery and a-la-carte subscription (e.g. I want monthly pass to 3 shows from Showtime and one show from HBO, but not the whole network), and users will ditch their $150/month settop boxes in droves.

nostromo 15y ago

Apple today is one of the biggest gaming companies out there (because of the iPhone and iPad)... But they don't really act like it. You see it all the time -- they push enterprise work apps on their devices, even though the vast majority of Apps purchased are games, games and more games. Think about all of the Wiis and XBoxes out there -- those people would gladly buy an iTV for their existing TV if Apple would embrace the gaming market. Integration with your iPhone and iPad and computer would give amazing opportunities -- much more than the Wiimote and maybe even Kinect. This should be their entry into the TV space. I don't know why they don't see this -- probably because their senior management is too old to take the gaming space seriously. And moving the gaming market away from PCs / XBox / Nintendo and to Mac and iOS -- it could have great ramifications for several Apple lines of business.

2arrs2ells 15y ago
Anyone remember the Pippin? Apple released a (terrible) gaming console back in '95/'96. I don't think prior mistakes (or general ignorance of the games market) are the reason there aren't apps on the Apple TV now. Maybe it's a hardware thing (A4 can't drive games at HD resolution)? Maybe it's a chicken/egg issue (not enough Apple TVs to warrant developer attention)?
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- i386 15y ago
  Remember that Apple at this time was a company that made terrible computers and handheld devices too (Remember the Performa and the Newton?) Doing games on the AppleTV wouldn't be that unattractive for Apple, consumers or developers: 1) The asking price of the Apple TV is very competitive ($129AUD last time I checked) compared to most consoles on the market. You can buy three or four of them for the price of a XBox 360, Playstation 3 or a Wii. 2) Apple currently market the iPod Touch as a portable gaming system and there are a lot of children/teenagers who have bought one because the games are cheap and addictive - theres no need to go to the store or use their parents credit card to purchase. 3) The amount of hit games first sold on the AppStore is testament to the amount of work Apple have done to make their platform an attractive target to game developers. 4) The current Apple TV uses the same SoC that the iPad currently does. While I am no hardware expert, I'd imagine that later revisions of this SoC would be at least as powerful as Nintendo's Wii. While the Wii is "underpowered" compared to the PS3 or XBox 360 it has been a roaring success because the content, not the technical capability, has drawn in casual gamers.

tienshiao 15y ago

I think the iPad could be Apple's set top box. You can see pieces of it in place already. - content: The recent apps from TimeWarner and Comcast. iTunes is obviously another source. Games are another source of content. - AirPlay: Extending AirPlay to support video out doesn't seem to farfetched. This would only really be needed for non-video applications (ie: games). - Integration with TVs: Presently, you need an adaptor (the AppleTV), but it would not be farfetched to see the AirPlay functionality built into the TVs (like the Samsung TVs with wifi and apps already). There is precedence for this on the music streaming side with AirPlay.

wowamit 15y ago
Re: "Integration with TVs" - I doubt Apple would depend on a 3rd party for a core piece of the overall solution. So iPads as set top box is pretty much farfetched.

panacea 15y ago

"I am not citing these analysts to mock them. Hindsight is 20/20..." John "Claim Chowder" Gruber, could learn a thing or two from Mr Dixon.

elvirs 15y ago

I think another major problem with tv is that it has too much content which is hard to navigate in and it is not personalized. when I browse through channels there are so many things that I would never watch but today I have to be exposed to it and decide if its worth watching or should I move on. If my tv or the remote knew my watching preferences it would walk me among the channels showing things that I would prefer to watch at that moment. I am working on a project that converts your phone (with internet) to a tv remote and enables a personalized tv experience. I hope I can make it right.

tuhin 15y ago

Perhaps the Apple entertainment TV is already out there in the form of Macs, iPads and iPhones. Maybe it is just me thinking stupidly but from the way I see, the iTunes is the new Apple set top box. Certainly the Airplay and other features they are adding seem to point that way. What if they are able to have cheaper subscription rates for shows (entire season, maybe?), entire NFL season etc. I chose what I watch and when I watch and the experience can hardly get any better. Of course I am not saying that iTunes is at its peak of innovation, but just saying that perhaps Apple is not bringing innovation to TV but bringing TV to a host of innovative devices. For me every bit of TV watching happens online and I would like to believe that that is the trend the industry is witnessing. What else defines YouTube buying rights for streaming live IPL matches for India, a country where TV sets definitely outshine the web streamers.