Daniel Eran Dilger in San Francisco
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Reality Check: Apple TV isn’t turning into a TV

Daniel Eran Dilger

After Steve Jobs described in detail why his company isn’t putting its efforts into trying to revolutionize TV, TechCrunch has decided that the answer may be for Apple to begin building its own televisions, a gangrene solution to a hangnail annoyance. More likely: Apple will merge Apple TV with the Mac mini and deliver a new iPhone OS based device to serve streaming iTunes content and apps to the living room TV.
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Apple televisions aren’t going to fly

This idea keeps raising its head as analysts regularly step forward with predictions that Apple will begin branding its own TVs real soon now. This is absurd. Apple’s products are getting smaller and selling in higher volume from the company’s small retail stores, not getting tremendously large and selling at razor thin margins from huge warehouse outlets the company doesn’t have.

Do any of these analysts know why Apple doesn’t sell its own printers anymore? There’s too much competition, not enough potential for any profits (margins all come from consumables, not the devices) and it makes more sense to partner with third parties to make these products available, earning a fair retail profit while giving up the thin manufacturing profits.

In the area of televisions, Apple has no interest in stocking TVs in its retail stores. It simply can’t. Go to Best Buy or any other TV retailer and you’ll find walls of different TV sizes and technologies to fit a wide range of consumer choices. Apple can’t compete with that dynamic, low profit market in its boutique, mall-bound retail stores. The idea is preposterous.

Of course, there’s also some variety in PCs, but nothing quite as vast at TVs. The price span of PCs at Best Buy is pretty narrow, while TVs range from cheap to very expensive. It would be extremely difficult for Apple to stand out as a premium vendor of TVs, far more difficult than standing out among PCs with its Macs.

And very clearly, Apple isn’t looking for more Mac-style premium niche businesses (notice how its backing out of the server market and RAID devices); it’s creating new, high volume mobile devices that can stand out in their mix of price and features. This would not only be harder to do in televisions, but would be far more expensive for the shred of profit that Apple might make for all its efforts.

Apple HDTV rumors resurface (2008)

Where is Apple TV going?

Recent rumors of a cheap iPhone OS device that could replace Apple TV as a hard drive-based, Mac OS X running appliance and stand in its place as a streaming device for iTunes content make a lot of sense. It could alternatively be branded as an AirPort Express for video.

Apple already knows how to deliver slick TV features, as a variety of hotels and cruise lines have set up rich media systems that port digital TV and on demand content to Mac-based TVs. The problem is that this sort of thing requires a sophisticated back end, a fat pipe, and a fairly expensive TV (attached to an Apple TV or full Mac).

As Jobs pointed out, cable systems across the US are run by a hodgepodge of different operators, each using different equipment and signaling. Sure, analog cable is simple enough, but that requires analog-to-digital encoding hardware to present in a fancy user interface. Digital TV is different across various systems, and is completely different around the world. Just ask the DVR companies that build equipment that works differently in each country.

Apple has never shown any interest in putting millions into fixing TV menus and programming guides for cable systems because there’s no money in it. There’s no potential for profits from hardware as the market is locked up by operators who already have cheaper alternatives they think are good enough. There’s little opportunity to directly sell users on nice hardware, unlike the opportunity Apple created for itself in smartphones.

And there’s huge risk that any work Apple created would be immediately ripped off. That means Apple’s opportunities in the TV business are pretty much confined to being the free R&D arm for Androids’s Google TV.

Apple TV & the Mac mini

With inventories of Mac minis growing reportedly scarce, it’s likely Apple will scrap the existing Apple TV and simply port its software as a free bundle for Macs, reverting it back to its origins as Front Row (4.0) and serving the role of giving people another reason to buy a Mac mini instead. The Mac mini is a lot more powerful and in some cases versatile, and Apple needs to stock it anyway, so by merging it with Apple TV the company gets one placeholder serving two niches at once.

That opens a gap for a media streaming device based on the iPhone OS, designed to stream content from the expected iTunes cloud service. As an iPhone OS device, Apple could easily get developers to port their iPhone and iPad apps into a format that could work on TV, being controlled by touch from an iPhone, iPod touch, or iPad. That solves the whole pointer/keyboard problem that has always plagued “web-enabled” TV devices.

Such a move would shore up the iPhone OS App Store with a fourth TV leg, joining smartphones, media/game players, and tablets. With that launched now, Google TV would look rather lame by the end of the year in its attempts to create Android apps for TV sets from a variety of squabbling TV makers, each with its own user interface. Google doesn’t understand the problem of fragmentation, so expect Google TV products to be far more of a mess than tablets and even worse than Android smartphones.

A headless iPod touch for the living room

A new streaming device, essentially an iPod touch without a screen, could be sold on the cheap as a near-loss leader as a way to sell iTunes content including movie rentals, TV apps and casual games. It could help launch iTunes cloud services, and the software that powers it could be included on new iPhones and iPod touch devices, enabling users to get the same TV features from their phone or media player.

This would also enable Apple to invest in media platform features that benefit all of its iPhone OS devices: things like iTunes Radio support and third party apps for Netflix and Hulu (although there’s no way Hulu is going to license its content for playback on TV). Note that an iPod device is what many of us originally expected instead of the Mac-based Apple TV.

How Apple TV can score at the big 3.0

Such a product would be hard to beat, given its low cost and deep integration with iTunes. Google still has nothing like iTunes, which is why Android has nothing like the iPod touch. By making a “headless touch,” Apple could extend its coverage to the TV, enabling it to recycle its investment into Apple TV as a Mac feature.

It’s not like the company is making hardware profits from Apple TV now, so swapping in iPhone OS hardware that’s cheaper to build and doesn’t involve moving parts and leverages the vast economies of scale (that enable Apple to sell its iPod touch for $199) makes a lot of sense. Meanwhile, Apple gets an extension of its App Store that works in the living room with little additional effort from Apple or its third party developers.

40 comments

1 stormj { 06.03.10 at 2:48 pm }

I think the AppleTV is the example that Drance was missing in his point about what if the iPad had come first. I agree with his point, but the AppleTV is exactly what would have happened. Something people didn’t really know what to do with, as he says.

Now that the iPhone OS is evolved enough to express itself in the living room, I think that’s the obvious answer. It’s rather silly that there’s a Netflix app for iPad, but not for AppleTV (at least without jailbreaking it).

2 mscabot { 06.03.10 at 3:25 pm }

I think a iPhone device in the living room would be great, and agree that it is on it’s way. I think a announcement at WWDC conference is going to happen. But the device won’t be available until the fall to give developers time to make some apps with the new SDK that will be required to make apps for the new apple tv.

3 Phred { 06.03.10 at 3:32 pm }

While I think you are probably right on this one I’m not sure all your argument is necessarily valid. Apple doesn’t compete in the low end with their PCs, there is no reason to think they would do that with an Apple TV. The model that could apply is that of Bang and Olufsen, high value high price items typically sold in boutique shops. An Apple television could come out in two or three screen sizes, easily accommodated in an Apple Store and not competing directly with other TVs.

If Apple brought their human interface design skills to a TV along with some added value through iTunes Store I’d be interested.

[But what size? A relatively small 27" model that takes up as much space as an iMac with none of the profit? A big 50" display that would take up all the room in most stores just to stock a half dozen?

And an interface to what: analog NTSC/PAL/SECAM over the air? Add support for all the cable operators' scrambled channels, leaving behind a few that would anger those subscribers? Or simply be like B&O and make a nice TV design that plugs into the standard TiVo/cablebox much like a monitor, and every other TV out there? Like Jobs said, the problem isn't technology, it the business model.

I am a little surprised, however, that Apple doesn't retail a good video projector, along side those mini ones suited for mobile devices. Even there, it would only have a video monitor, not a TV+. The problem is that CableCard isn't good enough to solve the problems. Perhaps Apple thinks TV will eventually be replaced by downloads or streams, once there's enough pipes in place to do that. Much easier to control than trying to manage the various signals/DRM of all the cable operators worldwide. - Dan ]

4 adobephile { 06.03.10 at 4:02 pm }

Steve Jobs must have really had a hard time keeping a straight face during the D8 Q&A about Apple TV. Apple is in such a sweet spot right now as the electronics industry “savior” of the whole damn world.

5 John E { 06.03.10 at 5:15 pm }

yup, totally with you on his one. just hope jobs does this next week instead of making us wait until the fall.

6 Dorotea { 06.03.10 at 5:37 pm }

I lve my App,e tv… I don’t want it to go away… I would be very sad if it died and I couldn’t replace it.

7 harrywolf { 06.03.10 at 7:38 pm }

The notion of Apple as a ‘Bang and Olufsen’ type high-end luxury goods producer is wrong.
Apple make inexpensive high-end products because the world has changed and there are no truly expensive products any more, unless you specifically want something encrusted with diamonds.

As components get smaller and cheaper, it has been Apple’s software and design that has created the remarkable iPhone and iPad for cheap.

The Apple TV device can be small but do a lot and have big storage and still be under $500.

Its all about the software in a world where stuff is now cheaper than it has ever been.

Macbook Pro for $1200 – AMAZING!

8 ericdano { 06.03.10 at 8:37 pm }

Honestly, Apple has a chance to do something amazing. Its partnership with AT&T could allow them to deploy an OS based on AppleTV for AT&T’s U-Verse service.

U-Verse currently uses Windows CE5. Now, Apple could easily do what Windows CE5 does, plus it could allow you to have access to YouTube, or the iTunes Store, or to remote content on you PC/Mac. It could be a HUGE thing for Apple…..a real way to make that jump to creating a digital hub.

I emailed Steve Jobs on that but……..nada…….I’m sad

9 Berend Schotanus { 06.04.10 at 12:38 am }

Seen from a customer point of view I think integration of Apple TV and Mac mini absolutely makes sense. A headless iPod touch would be absolutely viable from a technical point of view but it is beyond my imagination how such a device would encounter any physical attraction to its customers.

10 gctwnl { 06.04.10 at 2:13 am }

A very interesting perspective as always.

Note that Jobs has stated he is all in favour of ‘agressively priced volume’. He knows you need market share / ecosystem to survive iu any platform situation. What Jobs is against is ‘razor thin margins’. So, what makes up Apple’s DNA?
1. A strong focus on user experience (see Jobs story about how the pad preceded the phone, it all started with a user experience request)
2. A quest for volume (aggressively priced so the same proposition cannot easily be undercut)
3. A quest for margins
1 enables 2, 1 & 2 enable 3.

It is a brilliant strategy.

So, in areas where they can’t compete, they exercise hobbies until they can (Apple TV, Servers). They need a viable desktop/laptop business because it is a prerequisite for the app-ecosystem. Everybody is expecting an iPhone (OS) centered keynote, but iPhone OS has already been presented and there is only so much you can tell about new iPhone hardware.

I am hoping the desktop foundation of Apple gets some attention (mini, mini+?, new MacPro’s – especially nice for developers after all) next to what Daniel suggests. As a ‘truck’ person I sincerely hope Apple will stay in the ‘truck’ business.

11 ChuckO { 06.04.10 at 4:22 am }

@harrywolf 7, Well said.

Steve got it completely right. I want one good set top box or specialized for TV computer. I don’t want to buy a TV with Apple TV or Google TV built in just like I don’t want a TV with a BluRay or any other device built in. I want to be able to change set top boxes not TV’s.

The other thing is the geek dream of watching what you want when you want for LESS MONEY ain’t going to happen. If and when you can cut the cord with the cable company (for TV) will be the day you start paying by the bit for broadband. There ain’t going to be any free lunch.

12 ChuckO { 06.04.10 at 4:32 am }

“Do any of these analysts know why Apple doesn’t sell its own printers anymore? There’s too much competition, not enough potential for any profits (margins all come from consumables, not the devices) and it makes more sense to partner with third parties to make these products available, earning a fair retail profit while giving up the thin manufacturing profits.”

Great point.

“In the area of televisions, Apple has no interest in stocking TVs in its retail stores. It simply can’t. Go to Best Buy or any other TV retailer and you’ll find walls of different TV sizes and technologies to fit a wide range of consumer choices. Apple can’t compete with that dynamic, low profit market in its boutique, mall-bound retail stores. The idea is preposterous.”

It takes a lot of space at my local Best Buy to display not very many TV’s.

13 ChuckO { 06.04.10 at 4:56 am }

I don’t completely understand the pitch here. They replace AppleTV with a $600 MacMini, a $200 iPodTouch (or more expensive iTouch, iPhone, iPad) for a remote and a new $100 device to connect the MacMini to the TV? Sounds expensive and complicated.

14 gslusher { 06.04.10 at 5:45 am }

@ChuckO:

Maybe you mis-read what Dan wrote, as what you describe bears no resemblance to what he wrote. Dan said that he thinks that Apple will make the Apple TV SOFTWARE available as a bundle for Macs (including the Mac Mini) for those who want that sort of function (i.e., Front Row 4). The “TV device” he wrote about would be a “headless” [i.e., no display] iPod touch, based upon the iPhone OS. Re-read the article.

Also, what is this “iTouch” thing? Who makes it? Apple sure doesn’t.

15 ChuckO { 06.04.10 at 6:31 am }

@gslusher or should I say Douche 14,
iTouch is a common shortening of iPod Touch. Did you really not get that?

So if your interpretation of the article is correct than Apple goes from a device anyone can buy (AppleTV) for a reasonable price that works with any Mac or Windows based iTunes installation or on it’s own to something only Mac user’s can run? That’s exactly what I described with the exception that some folks already have the Mac.

Doesn’t make sense to me. I’ll be amazed to see it happen and would bet against it.

Engadgets take on AppleTV makes much more sense.

16 olorin { 06.04.10 at 6:34 am }

If there indeed will be a new Apple TV device based on iPhone OS ( which would make sense IMO ). Then it is not a stretch to imagine it will do all iPhone, iPod Touch and iPad games. The potential for this is huge. Consider: using iPhones, iPod Touches, and iPads as controllers and the TV as a big common screen, the device in your hand could show your private stuff, your hand of cards, your scrabble letters, your boggle word list, etc… This concept allready exists using an iPad as common screen (Scrabble e.g.).
The Wii would fall over and die, other console makers would have a fit.

17 SkyTree { 06.04.10 at 6:41 am }

Well said Dan. I wonder why these bloggers don’t take the time to think about how ridiculous the suggestion that Apple builds its own TV’s sounds. There are maybe 4 major Japanese, 2 major Korean and many other companies worldwide in the TV display industry. Apple’s iMacs and Cinema display use just 4 of the products of these companies. TV makers typically sell models in up to 12 sizes with three ranges for each size, and they all have to be sold from stores where users can see them.

I think you may be right about the Mac Mini and AppleTV convergence, although I can’t see Jobs introducing that plus a new AppleTV plus a new iPhone next week. Lets assume that he could announce a new range of Mac Minis, to include on with no optical drive, one hard drive and an HDMI port, together with a new software update to OS X that allows Front Row to display iPhone and iPad apps, maybe at 1x or 2x or even 4x but getting larger later. Jobs might also explain how the new Datacentre in Maiden, North Carolina will contribute to it Front Row’s capabilities.

Six months down the line, when app developers have had a chance to work on big-screen versions, and when iPad factories have a chance to take a break from meeting massive iPad demand, then you might see the “headless iPod” version of AppleTV.

Here’s what I wrote earlier this week:

Reported rumours that Apple is planning on selling a revised version of the AppleTV that is tiny, has no hard drive and costs less than half the current version may be based on some knowledge from someone who works, or used to work, for Apple. Eric Schmidt, for example?

Or they may be entirely speculation. Either way, they have attracted a lot of chatter, and whether or not there is any truth in them, it would be very surprising if Apple was NOT thinking about ways to improve the 3-year-old AppleTV product that has been profitable enough, but has not enjoyed the wild success of other Apple devices like the iPod, iPhone, iPad, iMac or MacBooks.

The rumored device is like an iPhone or iPad but with no phone, screen or battery, just a small amount of internal storage and connections for High Definition 1080p video out and power. Some people describe this as “two connections”, but the iPhone and the iPad currently handle video out and power, along with data and USB, via a single connector. Electronically it is rumoured to have the chip and the capability of an iPad.

Interface-wise, the current Apple TV uses a third version of the Mac OS, one you can also invoke on any desktop Mac, and optimised specifically for Media content, called Front Row. The rumours suggest that the interface for the new AppleTV may be more like the iPhone and the iPad interface, and may therefore be able to use the same Apps, games for example, with some capability, available now or later, to enlarge them for the “home theatre” big screen. It’s equally possible that Front Row on the new AppleTV (or even an iMac) gets a Games or Apps media choice. Would that be enough to make it worthwhile for Apple to introduce such a machine?

Only if you could control it. The current Apple TV, like the iMac, uses a famously minimal 7-button infrared remote controller, in contrast to the enormously-complicated multi-media controllers other video devices use. Even so, such remotes are notoriously clumsy when you need to input text or IP addresses. One of the features that made the iPhone unique, and allowed the iPad to be developed, was replacing multiple buttons and keyboard keys with a touch-screen interface where the controls were presented by software and could be changed to suit the context. Removing an infrared interface on a device that must include WiFi capability would be one of the cost-saving measures needed to move from $230 to the $100 level. It may have Bluetooth enabled so you can use a wireless mouse or keyboard or it may not. So how likely is it that such a device could be controlled from a WiFi-capable iPhone or iPad rather than an infrared remote?

Conversely, why would Apple sell one if it did not?

Even if you could get Games or other Apps on your $100 AppleTV – AND control them from an iPhone or iPad, would that be enough to make it more popular than the current AppleTV?

Confession: I do not own an AppleTV. The few people I know who have one are very pleased with it. As I understand it, Apple TV is one of the devices you can plug into a High Definition TV, along with a DVD or BD player, a Cable TV box, an X-Box or other stuff, and you can select any of these along with any terrestrial broadcasting your TV can receive. If so, whatever the AppleTV can do is only available when the AppleTV is the selected input source.

If my iPad was able to control my TV, I would want it to be able to control the TV *ALL OF THE TIME*, not just when the AppleTV was dishing up my iPhotos or my iTunes or YouTube. I would want to be watching the news on my TV and find a weather map on my iPad and make the HDTV display it so I could say “hey, guys, it’s raining this afternoon” or show the Wikipedia page or Google StreetView of the latest terrorist outrage.

Now the internet connection could allow the AppleTV to do that, but that wouldn’t work if I was watching the regular news over terrestrial broadcasting or cable TV. In order for the AppleTV to do that, Apple would need to be streaming those terrestrial broadcasting or cable TV channels over an iTunes Store connection. With or without subscription, with or without iAdvertising.

And if Apple was ever going to do that, they would need a MASSIVE server farm!!! That would cost billions of dollars, and they’d have to set it up somewhere where the energy costs and the tax breaks made it worthwhile.

Somewhere like Maiden, North Carolina, for example????

18 ChuckO { 06.04.10 at 6:42 am }

or in other words there’s no way Apple releases a product like this that only works with Macs. No way. They aren’t cutting off Windows users. That’s madness. No Windows iTunes, no iPod as we know it. iPad works with any PC Mac or Win running iTunes. This can’t be what Dan meant.

19 SkyTree { 06.04.10 at 7:04 am }

Sorry, that should read:

“a new range of Mac Minis, to include ONE with no optical drive ….. ”

Thinking about the “headless iPod”, I can imagine that Apple would want to remove as much complexity as possible. It needs a display cable and a power supply, which could both be handled by a 30-pin connector, assuming the voltage was supplied by a USB connector. It could work with no controls at all, if it started up as soon as it got power over the USB cable. It could be controlled entirely by a WiFi-connected iPhone, iPad or iMac, with the iPad being the controller of choice. The problem that I can see is if it doesn’t have a battery or a button, how do you switch it off?

Steve Jobs’ response at the D8 interview in which he talked about all of the problems of the TV industry indicates that he and Apple have spent at least 3 years thinking about how to approach the TV market, just as they spent time turning the mobile phone industry around, so I am sure the AppleTV team have worked out a way to eliminate the Off switch.

20 SkyTree { 06.04.10 at 7:12 am }

@ChuckO

As stated, I’m not an AppleTV owner, so I don’t know how well the current AppleTV works with Windows PC’s, or how much it needs to. But there is no reason to think that whatever AppleTV can currently do with iTunes from a PC will be removed from a future version.

21 mailjohannes { 06.04.10 at 7:13 am }

With the same line of argument, Apple shouldn’t sell computer monitors. But it does!

I have to say that I too predicted that an AppleTV could emerge.
But that was before (or in the early stages of) the rise of the portable iDevices. That part of your argument makes sense.

J.
[but Apple's Cinema Displays are high end devices paired to Mac sales, and they don't have lots of equivalents on the market (particularly when they arrived). People aren't going to buy a tv (low res) along with their Mac, and who would shop at small retail stores for a tv? Not high volume, certainly nothing like iPhone OS devices people can pick up and carry out on their trip thru the mall - Dan]

22 ChuckO { 06.04.10 at 7:54 am }

“headless iPod Touch” is just so wrong. It’s a display-less iTouch. Headless give’s a brain-less connotation.

@SkyTree 19, Sorry my response #17 was an addition to #15 which was a response to @gslusher 14. Wheew. @gslusher 14, was telling me I’m an idiot for not understanding Dan’s article which may be the case but the article doesn’t make any sense if it states you’ll need a Mac running “Front Row” in order to use this NEW Apple TV that Engadget described. I’m just saying Apple is NOT selling anything of any significance that requires a Mac. Require iTunes sure, Mac no.

That was also the flaw with Engadets initial article stating it will use Time Capsule for storage. i don’t see Apple releasing any product that REQUIRES anything but iTunes.

23 gus2000 { 06.04.10 at 7:58 am }

If Apple were to get into the TV business, it would be through partnerships. For instance, they could convince a TV maker that integrating an iPod dock would allow for cross-marketing. They might even put a demo set in the Apple Stores. But they wouldn’t make nor sell the whole TV.

I can’t believe AT&T hasn’t gone crawling to Jobs to get an ATV variant for their U-Verse box. I tried the U-Verse demo at the AT&T store and is was miserable. Being in a committed relationship means begging for affection every now and then, and AT&T it’s your turn.

24 ChuckO { 06.04.10 at 8:15 am }

@gus2000 23,
“I can’t believe AT&T hasn’t gone crawling to Jobs to get an ATV variant for their U-Verse box. I tried the U-Verse demo at the AT&T store and is was miserable. Being in a committed relationship means begging for affection every now and then, and AT&T it’s your turn.”

They may have but based on Job’s comments at D8 Apple’s not interested in working on a lot of specialized versions of their products customized for different systems.

25 SkyTree { 06.04.10 at 9:17 am }

ChuckO, Dan, all of you,

Please bear in mind that Steve Jobs has to say what he has to say. If his company is investigating and developing a new product, for example a new wireless bluetooth 5.1 surround sound 3D stereo enabled toothpick, but it is not yet working, he has to say “we are not selling toothpicks”, even if 6 months later Apple does sell them.

What you might consider significant is how much detail he went into about how Apple is not selling a TV device right now. Every obstacle he mentioned must be something that Steve and Apple staff have been working on a solution for over the past 3 years if not longer. Whether they have found that solution may be revealed next week or it may not. But compare what Steve Jobs has said about the obstacles to the TV market with what he has said about the obstacles to the mobile phone market before Apple launched the iPhone. Does this sound like someone who has given up on finding a solution that is “revolutionary and magical”?

26 adobephile { 06.04.10 at 9:47 am }

@SkyTree
Once in a while I see an article poster with some perception and common sense.
I recall Steve, Tim, et al, making benign comments in the past about “tablets” and “netbooks”, etc. They were at the time simply not showing their hands. Now we have the iPad which stands to outsell even the Mac sooner than anyone expects.

I’d say the next version of Apple TV or its successor stands to have a similar impact.

The sometimes difficult trick is to simply wait. It’s going to be a long weekend ’til Monday.

27 daGUY { 06.04.10 at 11:11 am }

“In the area of televisions, Apple has no interest in stocking TVs in its retail stores. It simply can’t. Go to Best Buy or any other TV retailer and you’ll find walls of different TV sizes and technologies to fit a wide range of consumer choices. Apple can’t compete with that dynamic, low profit market in its boutique, mall-bound retail stores. The idea is preposterous.”

Why? Wouldn’t that exact same argument also apply to computers?

[More than half of the Macs Apple sells are notebooks, and likely retail stores ship far moor than 1/2 as notebooks. The rest are the tiny Mac mini box, and the premium priced iMac. Apple does not sell many MacPros through its retail stores. I doubt that consumers would flock to Apple's website to buy TVs with a nice interface that may or may not work with their cable/sat service, if they were to cost any significant premium over standard TVs. And which models/sizes of TV should Apple ship? The more you think about it, the more obvious it is why Apple hasn't launched a branded TV. - Dan ]

“As an iPhone OS device, Apple could easily get developers to port their iPhone and iPad apps into a format that could work on TV, being controlled by touch from an iPhone, iPod touch, or iPad. That solves the whole pointer/keyboard problem that has always plagued “web-enabled” TV devices.”

Not really – not if you need a $199 remote! Apple TV has to be compelling enough on its own. You don’t want to sell it only to people who already have an iPhone/iPod/iPad.

[The market for iPads and iPod touches and iPhones has large amounts of overlap. That's why Apple created bundles that work on both small and tablet platforms. The number of people who have an Apple TV but don't have an iPhone or iPod touch are probably pretty small. - Dan]

28 ChuckO { 06.04.10 at 11:32 am }

@adobephile 26.
“I’d say the next version of Apple TV or its successor stands to have a similar impact.”

Anything involving media companies (especially TV & Movie studios) is not going to work out for Apple like iPhone stuff. They have no interest in helping this transition along. They want to stick with the status quo as long as possible. The only reason the music industry went along with Apple is because chaos in the form of Napster came along and knocked their dicks in the dirt. Apple could get the same thing going with publishing but people don’t have the same relationship to that stuff they have with music so I doubt it will be as big BUT publishing desperately needs Apple (right now). TV and Movie studios don’t.

AppleTV’s problem isn’t really the hardware it’s the media available. It’s spotty and weird and badly priced. TV and movies could sell a ton by doing what Steve told publishing at D8: PRICE IT TO MOVE! They’d make up on volume what they loose on price but they won’t until the bottom falls out (and it probably won’t).

29 JoseGaldamez { 06.04.10 at 11:38 am }

At D8, Steve trashed Roku, TiVo, and the soon-to-be Google TV saying consumers don’t want to pay for set top boxes. As a former owner of both the AppleTV and the Roku, that kind of stung. Overall, I’m looking forward to see what tricks Apple has up their sleeves for the next version of AppleTV, should there be one.

["Trashed," really? Perhaps you could say "commiserated," given that Jobs included Apple in the list of companies you could ask about the viability of the set top box market. - Dan ]

30 ChuckO { 06.04.10 at 12:39 pm }

I finally when HD last December. I was trying to decide between AppleTV and BluRay. I bought BluRay. I have DVD’s I still need to play and iTunes is weird and inconsistent with the movies in terms of selection, price and fromat (HD vs. not) PLUS the Apple Store near me has been playing the same grainy, bad sample on the AppleTV since day one. I bet I could walk in there right now and within five minutes I’d see Jack Black as “Nacho Libre” cavorting in a cape. So I bought Blu Ray. And I really didn’t want to.

31 adamk359 { 06.04.10 at 12:45 pm }

I am intrigued by the idea of a Mac Mini or (any Mac) getting this functionality. As Nintendo has openly begun a war with Apple in the mobile gaming arena, Apple could utilize iPhone OS to deliver the games found in the App Store to “the big screen” and begin decimating Nintendo (and Sony/MS) in the console market without even making a (true) gaming console.

In fact, it could be said that this could easily compete with “Games for Windows” and PC gaming in general since we’d be running this stuff on a Mac hooked up to a TV.

The reason Nintendo is coming out swinging is because Apple just basically “walked right in” (and really didn’t even know it till recently) to the mobile gaming market and they’re killing the DS in terms of prices of games, number of games, and quality of games. Having a DS, I know first hand that the games aren’t that great and I often don’t feel I got what I paid for. However, also having an iPod Touch, I don’t even know where my DS is anymore. Gaming is much more fluid, accessible, and cheaper on an iPhone/iPod/iPad than it is on a clunky (and now even larger and clunkier) DS.

The average high-end game for the Wii is about $49.99. The average high-end iPhone OS game is a mere fraction of that and is just as good if not better in terms of quality and detail. The same can be said for price against the PSP/PS3 and XBox 360, but not necessarily the level of detail and the quality. High-end games for these consoles are generally even higher priced, but you do get what you pay for usually and, unlike the Wii, you can enjoy them in HD.

However, since we’re dealing with a multi-touch platform, it might be difficult (or it might not…I’m not a developer so I don’t know) to convert touch based iPhone OS inputs to keyboard and mouse inputs, so Apple could come out with a new SDK that allows for keyboard/mouse inputs or with the use of an iDevice to input controls. Though, the use of an iDevice is a bit scary since you might have to look at it just as much as you would the TV to see what you’re doing since there’s no tactile way to know what button is being pushed. They could also utilize a Magic Mouse’s multi-touch gestures for input as well. This would probably be one of a few hairy things Apple would have to try to overcome to make this successful. The other biggie might be getting these games to support higher resolutions and still look good.

If they overcome those two obstacles, Apple could have something major on their hands that would turn the console and PC gaming markets upside down. The tech enthusiasts will lambast it to no end, but the average consumer would probably love it since they get the same apps/games they know and love at the same prices they know and love and be able to have the functionality they know and love…on a larger screen and it comes built-in to their Mac.

In the end, I wouldn’t be the least bit surprised if future iterations of the Mac OS begin looking a lot more like the iPhone OS so I think this is yet another integration of the two (we’ve already seen small bits and pieces of this in Snow Leopard) to further cement that theory making that eco-system that Apple loves go full circle.

32 MacinScott { 06.04.10 at 1:08 pm }

I guess I’m in the minority when it comes to individuals who like own their hardware outright and minimize my monthly service fees or contracts.

I have a Tivo Series 2 with LIFETIME service and a Series 3 on a annual service plan. Shame on Tivo for charging $199 to transfer the lifetime service to a new box. Only thing keeping me from upgrading the Series 2. But Tivo loses money, so despite the fact that Apple could “do it better”, I know they won’t get into the DVR business.

I also have a LIFETIME Sirius membership that paid for itself in the first 2-1/2 years. Sirius is slightly better at $99 to transfer service.

Amazing how many people don’t do the math. How many people think that it actually costs Apple $99 to build an iPhone and don’t realize that it’s heavily subsidized!

Anyway, I’m looking forward to an tv Take 3 running the iPhone OS. Time to give it a proper name though!

But, more than that I’m hoping Apple adds support for multiple users in the 4.0 update! The iPad is a shared computing device. Every family member should be able to pick it up and access THEIR content (email, photos, etc) without relying on the web. I would rather have multiple iPads stationed in each room, rather than an iPad for each family member to carry from place to place. Just think it’s an often-overlooked MAJOR MISSING FEATURE by a predominantly single, younger male demo that writes tech articles.

Daniel, what’s your take?

[Multiuser support in the iPhone OS is not likely a priority for Apple. - Dan]

33 ChuckO { 06.04.10 at 1:44 pm }

At D8, Steve trashed Roku, TiVo, and the soon-to-be Google TV saying consumers don’t want to pay for set top boxes. As a former owner of both the AppleTV and the Roku, that kind of stung. Overall, I’m looking forward to see what tricks Apple has up their sleeves for the next version of AppleTV, should there be one.

["Trashed," really? Perhaps you could say "commiserated," given that Jobs included Apple in the list of companies you could ask about the viability of the set top box market. - Dan ]

Yup, commiserated not trashed. He spoke about the TV set top business like a man who loved and lost and could still feel the sting of hard lesson.

34 ChuckO { 06.04.10 at 1:46 pm }

It’s depressing the energy that we put into these media devices. It is after all 95% shite that you can use them for.

35 enzos { 06.04.10 at 4:46 pm }

Amen to that, ChuckO!

36 maxijazz { 06.04.10 at 11:07 pm }

With new CPU coming to IP/Touch i rather expect new app (built-in perhaps) called “APPLE TV” (or “Front Row”). TV signal will come out through connector. What we would need to buy is cheap specialized dock with HDMI for $69.99 and maybe kind of remote for $29.99 (i cannot imagine that remote now, but Apple might figured it out, maybe even the same remote the iMacs use now). I can’t think about networking, too. The only ideas are:
1. IP/Touch gets 11n (it might be enough?)
2. dock gets built-in 100Mb NIC

What you say?

37 SkyTree { 06.05.10 at 6:13 am }

@adobephile
Thanks, but “perception and common sense” is why we all read Daniel Eran Dilger.

@ChuckO you too, but I don’t understand why you had to “choose” between BluRay and AppleTV – you can plug both devices into an HDTV …..

@adamk359
if I have understood your comment, it would not be too difficult to let an iMac, iPad or an AppleTV run iPhone apps, they are all running on the same Unix OS. The HDTV is just a display for whatever device is plugged into it.

Looking forward to the 7th June ………..

38 maxijazz { 06.05.10 at 9:19 am }

@Daniel
I can’t wait for my previous comment being not published yet.
So i post it again:
With new CPU coming to IP/Touch i rather expect new app (built-in perhaps) called “APPLE TV” (or “Front Row”). TV signal will come out through connector. What we would need to buy is cheap specialized dock with HDMI for $69.99 and maybe kind of remote for $29.99 (i cannot imagine that remote now, but Apple might figured it out, maybe even the same remote the iMacs use now). I can’t think about networking, too. The only ideas are:
1. IP/Touch gets 11n (it might be enough?)
2. dock gets built-in 100Mb NIC

What you say?

PS. Today morning with refreshed brain i think it would be great idea if the iPad gets that “APPLE TV” application. So it would explain latter update to IP4 OS, as there is time involved in preparing such app. Ohh, and clouded iTunes needs to be available. There is no reason why don’t create an app being remote control to the iPad.
PS2. The APPLE TV app should be available to all IP4 OS devices. It would be our choice if we watch movie/pictures/whatever on device’s screen or just dock it and use remote.
PS3. Another idea is Time Capsule or Airport Express gets the IP4 OS as they are networked devices, just need to get HDMI out. And they can stream to all other devices at home, even PC with iTunes.

39 WWDC 2010 Prediction & Speculation — RoughlyDrafted Magazine { 06.05.10 at 10:36 am }

[...] Reality Check: Apple TV isn’t turning into a TV [...]

40 doumdi { 06.05.10 at 6:31 pm }

Thanks for the article. I just discovered your web site few weeks ago and I must say I am impressed by the analysis and the thinking behind those articles. Keep on the good work! While reading your current article I thought that Apple might just replace the Apple TV by a new iPod / iPhone app + a new dock with HDMI output. This would avoid making a cheap copy of existing devices and offer 80+ million existing users new opportunities to connect the iPhone or iPod touch to their HDTV.

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