4 ms·

>If Apple can position the AppleTV as a console (maybe open it up to developers) or build something more along the lines of a traditional console, they will cru

>If Apple can position the AppleTV as a console (maybe open it up to developers) or build something more along the lines of a traditional console, they will crush. This opinion is pushed around a lot, however I cannot really see it happening, and I doubt Apple will ever pursue such a strategy. For Apple to enter the console market, they would have to compete with the big boys, meaning if it can't push 100 million polygons at 1080p it will never get great adoption (who will want develop for a console with graphics out of 2005, and who will buy a console that doesn't have Call of Halo 7?). This means they have to create a modern console platform AND sell it at the price of an iPad. I'm not sure how the ghost of Jobs will take the news once he finds out Apple is selling hardware at a loss. Next I doubt they would have anything to gain other than "you can now play CoD on the Apple ecosystem." They would lose money on the hardware, they wouldn't make much on the software if App Store profits mean anything (http://articles.businessinsider.com/2011-07-11/tech/29964545_1_app-store-gene-munster-apple http://articles.businessinsider.com/2011-07-11/tech/29964545... reports they may have made ~$300 million). It just doesn't seem like a good idea finically. As far as the game console ecosystem goes I don't think MS/Sony/Nintendo will ever have to worry about Apple. All in all, I am not really convinced that the App Store market will work for any of them. I strongly believe only Valve has the resources (and direction* ) to transition into the digital delivery era, at the expense of introducing yet another company into my living room. Still the question is how do you effectively deliver a magic box capable of playing Call of Duty at 1080p at the price of current consoles sustainably/profitably. Vavle's success so far doesn't worry about hardware. Their customers are either willing to spend $1000+ on a gaming every couple years, or just suck it up and blame Dell/HP for why their laptop can't play CoD. * If Sony got their shit together, you are right, I believe they would take over the living room. They almost did it with PS2, and if the PS2 had come a bit later, or the PS3 was able to sell as much they might have done it. I think Sony could have built an Apple level brand loyalty (in the sense of having a Sony Computer, Phone, Laptop, Console) and (if they got much better at software development), they could have built a Sony store to manage your content on all those devices (after all they already own most of the movies and music). In another universe Sony may have been a Google + Hardware.

natbro 14y ago
I honestly don't know if Apple will enter this market, but I'm not quite as pessimistic as you are about the profit margin as the reason not to. I think they could build a next-generation-console-capable Apple-TV and sell it at or below $199 while keeping their 40% margin. They would sell you each additional wireless controller (and it would be sweetly designed, I suspect) for the standard $79 peripheral cost. The primary contributor to their bill-of-material cost savings vs. competitors is that they already own and/or license at huge volume their CPU and GPU cores and know how to fabricate them in multi-core formats with high-speed cross-connectivity. They can also buy RAM and flash for SSD storage at better costs than anybody else. These are the primary cost drivers (basically money flowing to IBM, nVidia, etc for CPU/GPU and money flowing elsewhere for RAM/SSD/HDD) for xBox, PS, Wii. Apple would have dramatically lower overall startup costs versus the original xBox/xBox360 and PS2/3 given they already have a toolchain and SMP operating system with sandboxing, an App Store and its back-end, user-accounts and payment infrastructure, and numerous other costs shared with the rest of the Mac and iOS ecosystems. Apple wouldn't have a lot of work to do to train developers: tell us the screen resolution, how to interact with the controller and any other new hardware capabilities, tell us anything special about the GPU's and let us go to town with the existing toolchain we are using for iPhone and iPad. So, again, I have no idea if they'll do it, I just think it would be a very profitable business for them.
- theevocater 14y ago
  I'm vaguely imaging a scenario where they don't sell anything resembling a console, but expect you to own some sort of iDevice to go a long with your AppleTV, or maybe sell it with a iPod touch? But yeah, I could see your scenario happening. It would probably be amazing either way
- sounds 14y ago
  With Tim Cook's track record of world class supply chain management it will surely be profitable for them. When the iPod was introduced it didn't compete on tech specs with the other music players. "No wireless. Less space than a nomad. Lame." - the famous last words dismissing the iPod. When the iPhone was introduced it did have innovative tech but it was secondary to the overall experience. I'd say when, not if, Apple really wades into the TV market, they should be able to achieve the same kind of disruption. TV's are an obvious choice for Apple, because the TV is one of those consumer electronic devices that occupy a sweet spot between status symbol and the everyday always connected lifestyle. Thanks for the article. Sony/Microsoft/Nintendo better watch out!

natbro 14y ago

I honestly don't know if Apple will enter this market, but I'm not quite as pessimistic as you are about the profit margin as the reason not to. I think they could build a next-generation-console-capable Apple-TV and sell it at or below $199 while keeping their 40% margin. They would sell you each additional wireless controller (and it would be sweetly designed, I suspect) for the standard $79 peripheral cost. The primary contributor to their bill-of-material cost savings vs. competitors is that they already own and/or license at huge volume their CPU and GPU cores and know how to fabricate them in multi-core formats with high-speed cross-connectivity. They can also buy RAM and flash for SSD storage at better costs than anybody else. These are the primary cost drivers (basically money flowing to IBM, nVidia, etc for CPU/GPU and money flowing elsewhere for RAM/SSD/HDD) for xBox, PS, Wii. Apple would have dramatically lower overall startup costs versus the original xBox/xBox360 and PS2/3 given they already have a toolchain and SMP operating system with sandboxing, an App Store and its back-end, user-accounts and payment infrastructure, and numerous other costs shared with the rest of the Mac and iOS ecosystems. Apple wouldn't have a lot of work to do to train developers: tell us the screen resolution, how to interact with the controller and any other new hardware capabilities, tell us anything special about the GPU's and let us go to town with the existing toolchain we are using for iPhone and iPad. So, again, I have no idea if they'll do it, I just think it would be a very profitable business for them.

theevocater 14y ago
I'm vaguely imaging a scenario where they don't sell anything resembling a console, but expect you to own some sort of iDevice to go a long with your AppleTV, or maybe sell it with a iPod touch? But yeah, I could see your scenario happening. It would probably be amazing either way
sounds 14y ago
With Tim Cook's track record of world class supply chain management it will surely be profitable for them. When the iPod was introduced it didn't compete on tech specs with the other music players. "No wireless. Less space than a nomad. Lame." - the famous last words dismissing the iPod. When the iPhone was introduced it did have innovative tech but it was secondary to the overall experience. I'd say when, not if, Apple really wades into the TV market, they should be able to achieve the same kind of disruption. TV's are an obvious choice for Apple, because the TV is one of those consumer electronic devices that occupy a sweet spot between status symbol and the everyday always connected lifestyle. Thanks for the article. Sony/Microsoft/Nintendo better watch out!