For Apple, making a TV would be easy. It's changing TV that's hard.
I don't think anyone doubts that Apple could make a stunning HDTV. It'd look great, have an amazingly crisp screen, and sport a clean, intuitive interface with impressive features like Siri-powered voice control, access to tons of apps, and an HD FaceTime cam. It'd probably make every other HDTV on the market seem clunky by comparison.
That's the easy part. We all know Apple could do this tomorrow.
What's hard is actually changing the way we get television.
This is mainly because they way most of us get our TV is via cable or satellite, relatively expensive services which maintain tight control over the form and manner of our consumption. A few still get all over their TV over the air, and an even smaller (though growing) number watch stuff online via Hulu, Netflix, iTunes, and other services, but for the most part watching TV means subscribing to a cable or satellite service.
Anyone that wants to disrupt that relationship has their work cut out for them. Either you need to figure out how to work with the existing cable and satellite services people already have or you need to get access to enough programming to make leaving those services a no-brainer. Neither is particularly easy.
Here are some scenarios:
1. Work with what's already there
Google's solution to these problems was a box that was designed to work with the cable or satellite TV box you already had. It didn't work so well. This was partly due to poor design, but it was also an issue of it being very difficult to blend a web-connected service with legacy cable and satellite systems. Google's attempt was kludgy (let's just say it involved IR blasters) and it's not surprising it failed. Apple could conceivably try something like this, or try and work with CableCard, but they'd basically be creating a front-end for someone else's service and be at the mercy of the cable companies' efforts to make that experience as miserable as possible (just ask TiVo). Neither feels like something Apple would do.
2. Partner with providers
Of course, it's not impossible that they'd figure something out and get a cable or satellite provider to play ball, presumably by spending an ungodly amount of money, and work with them to build an Apple TV that worked seamlessly with your existing TV service. It's not hard to imagine at least one cable company doing it (partnering with Apple would be one way to stop subscriber churn), but for it to be worth Apple's while -- i.e. for it to be a large enough market -- they'd have to get most of the cable and satellite providers on board in order. And they'd have to do this over and over again in every country they wanted to sell Apple HDTVs in. It'd be much harder than dealing with the mobile carriers, and making matters worse, consumers often have very little choice in their provider. They may want to switch to a company that's partnered with Apple, but they might not have that option. Just like I would love to ditch Time Warner Cable for FiOS, but Verizon doesn't offer service in my apartment building. Again, a pile of cash can solve lots of problems, but this isn't a slam dunk.
3. Focus on over-the-air.
Most of the country receives free HDTV broadcasts -- even if they don't know it -- and it's certainly possible that an Apple TV would try and route around the cable and satellite providers, but most people want the channels they get via those paid services. Plus you'd be asking people to deal with setting up an antenna. This seems like a non-starter to me, but I figured it was worth at least mentioning.
4. Go online-only and create an IPTV service that would get people to leave cable and satellite
Apple could just turn its back on all the legacy providers and focus its efforts entirely on building a TV that integrates tightly with an online video service (though note that any TVs Apple sells would have to have an ATSC tuner -- that's mandated by FCC -- and I'm sure it would also have HDMI ports for connecting other components).
Prodding all of us into the IPTV future we know is coming would be very Apple-like, but it has its challenges. First and foremost would be to provide a mix of on-demand and live programming that is good enough to satisfy the needs of people who currently subscribe to cable or satellite. This will be difficult. The networks and studios that create television programming make huge amounts of money from the cable and satellite companies, and they're not in any hurry to mess that up. Apps like HBO GO are awesome, but there's a reason why they require to pay your cable provider for a subscription: they absolutely do not want to cannibalize that revenue stream. Unless there is a huge amount of money involved, those networks and studios aren't going to do all that much more than what they're doing already with Hulu and Netflix.
Further complicating things is the fact that the companies providing consumers the internet connections they'll be using to watch all this TV typically have their own competing television services. And guess what, they absolutely do not want to become dumb pipes and will do everything they can (including implementing even stricter bandwidth caps) to keep people paying for TV.
I don't know what Apple will ultimately do, but I'm pretty sure they don't want to sell a TV that you'll just hook up to a cable box. Think about it: how often do you use the interface on your TV versus the one on your settop box or Blu-ray player or game console? No, if they're going to get into this market and offer a TV with a great user experience they're going to have to change how we consume video. Building a TV with an amazing interface is meaningless if all you do is use it as a monitor connected to somebody else's box. I doubt they'd enter the market unless they felt they could do it right, and to do it right they need to challenge the way we get TV today.
As for content...now you're barking up the interesting tree. I've put a lot of thought into how Apple could make a successful TV business for at least 5 years. With iTunes alone they could stream so much content it wouldn't even be funny. Add on apps, and suddenly nearly everything is available. The problem with that way of thinking is that Apple wouldn't be remaking the market. Samsung, Sony and others already have TVs that do exactly that, using apps to stream video and music and photos.
No, Apple wants to remake the TV experience. Just look at Apple TV. The system is simple, intuitive, has a tiny remote with just a few buttons, etc. That's what Apple wants to do, except not on just a box. On the screen. Which means should Apple pursue it, as Steve Jobs wanted to (undoubtedly for years...remember, he argued that the Motorola Razr was junk way back when it was first being announced), then it is going to take a lot of time to set a foundation for all of these changes. They aren't going to stop cable...they are going to use their power to muscle in proper TV, TV as they see fit, out of the cable companies.
What that means is no more cable boxes, no more giant remotes, and no more dealing with your cable provider directly. It'll be just like the iPhone, where you can do everything through Apple, or if you want, buy the products through the provider too. But Apple will be your one-stop shop.
Online only is out of the question, at least until service providers decide to stream everything through the internet instead of through their systems. Apple isn't going to be able to change that. The infrastructure is too laid out, too entrenched. No, they'll work with current providers, or perhaps only certain providers as they did with the iPhone. Chances are the same thing will happen. Only one major company will be interested in working with Apple (probably AT&T), and the TVs will work with people's current cable boxes or without a box through the service provider directly.
However, considering Apple's size compared to the pre-iPhone era, chances are they won't be locked in with one provider. Likely, providers will be too scared to not accept Apple's terms, as ridiculous as they will undoubtedly be.
Compared to something like LG Smart TV, I can totally envision an Apple TV that is WAY better than any other TV on the market simply because of revolutionary software. Apple has a huge market here if they can make an all integrated HDTV that allows you to connect to your Cable provider, tie in all of your online services, and manage iTunes content.
I could totally be down for something like that, but I don't think I would spring for an Apple TV (that is likely to be a tad more expensive than other options) if all it did was incorporate Apple TV into an LED TV set. If it includes Siri (or some other amazing feature) and allows me to navigate TV/DVR/my media with my voice, I can't foresee myself not owning one.
Further to that they've had some monumental flops with attempts to move into this space before (anyone remember the hifi? en.wikipedia.org/wiki/IPod_Hi-Fi ) I couldn’t even find it on gdgt.
The only apple product that's been really good in version one I can recall is the iPad. And it could be argued that the iPad was a refinement of the iPhone.
Apple have demonstrated they can make expensive screens, and do streaming media, beyond that I am left with a lot of doubt that that they can pull together the rest of the equation. I'd definitely not want to be an early adopter. Possibly generation two.
When you look at your TV, what do you see? I see a TV(of course), receiver, DVD player, satellite receiver, an Apple TV, Xbox, Wii, sub-wolfer, three speakers (part of the surround system), several remote controls, a router, an Airport Express, and a mess of wires. The TV has its own interface for making adjustments like screen size, color, internet based applications (which we never use), ect. The satellite receiver has its own interface for changing programs, DVR, ect. The Apple TV has its own interface for streaming and renting movies, watching podcasts, etc. It's a wonder we can usually work most everything. My guess is that my setup is not too different from most others.
What Do I Want
If I could get rid of most of the boxes, get rid of the wires, get rid of the remote controls, get rid of all the different user interfaces, I would be ecstatic!
Can Apple Give Me What I Want?
Maybe. Bose has a product called VideoWave which is a significant and pricey step in the right direction. Bose, however is constrained because it has no "eco-system." This is where Apple can make a major difference and gives it a good shot at being able to do so. Imagine getting a TV with DVR and satellite or cable box functionality built in (I doubt that even a huge company like Apple can make the needed agreements with all of the various services, but who knows). Imagine not having to have external speakers. Imagine having a TV that can play all of your media. Imagine having a TV system with a simple interface and a single simple remote or maybe no remote control at all. Let's just say that if Apple can't do this, then I doubt that anybody can.
I feel like Netflix has a similar vision, and they just stumbled trying to go streaming-only, so perhaps a joint venture of Apple, Hulu and Netflix? That's probably dreaming too big, but man if they could pull that off....
The big roadblock might be Comcast's merger with NBCUniversal, which is part owner of Hulu. But hey, if Comcast hasn't already found a way to kill off Hulu, maybe there's hope yet.
Apple TV kind of sucks too. I chose a Roku box over the Apple TV. They are both very affordable, but I just had no interest in Apple TV and having to deal with iTunes and such. I'd rather buy and rent content on my xBox 360.
Even more exciting, current TV is one way. Open up two-way TV over Internet and the TV companies will be wetting themselves with interactive + shopping services, cloud based PVR and most importantly viewer statistics! Mega money.
And that's a big "If."
But beyond that, wouldn't they have to either support a fairly large range of screen sizes, or make the Apple TV have the exact same capabilities as the full television product? It seems to me that they would...
With that said, I tend to agree with the person who said (elsewhere) that Apple simply might not be able to resist designing a beautiful slab of hardware that would be the focal point of your living room.
the cable companies have owned a bottleneck in the TV/Internet stack for so long that it's going to have to take a special effort to dislodge them. If anyone can figure this out, it's Apple, and once they do, the floodgates will have opened. they key is to either give TV/internet companies incentives to allow this new TV service, or to somehow bypass the companies and make them irrelevant, then have them come back begging to be just plain old tubes afterwards.
I was looking foward to using the screen mirror over airplay as a 'sort of' console, but it's laggy for me in most games. I suspect that it's processing on the iPad end thats killing it. The things that have the most trouble are not large movements, but lots of 3D. For instance the slow moving intro to Dead Space drops miles of frames every time.
Possibly it could work better with iPad3.
HDMI, though? Nay. All Thunderbolt. I could even see them opting to attach that ATSC tuner to some sort of internal antenna configuration so the whole device is free of any interaction with other services.
I'm most curious about the body. What sort of frame would they design? Johnny Ives minimalism could be detrimental in a market where the norm is simple and elegant. I don't expect 1st gen iMac-esque color palettes, and it would take a lot of aluminum to house a 40+" TV, but maybe white plastic. It will certainly look good.
Pricing will be interesting, too. In the 40-60" size you see a huge variety of prices, based on features and quality, so charging a premium for the TV won't really be an issue. But TV's are such a democratic thing that I could see, perhaps over time, a move for a discounted model (a la iPhone 3GS).
What would be the totally wild out of left field move, though? Making a deal with Verizon FIOS and Comcast for TV's subsidized through a contract. It would make putting up with Comcast a lot easier if the user experience was driven by Apple.
If what you want is a TV, rest assured that any AppleTV will not be for you. It will be for the average consumer who just wants to watch streamed content and do video calls to their friends and family who also have one. This will be just another device for the iTunes ecosystem, I'd bet money on it.
I believe number 3 is the most likely scenario. They have a budding relationship with the video content industry (as begrudging as it might be) with their iTunes rental and purchase models. I think the next logical step is to get the content industry to bypass the cable industry all together by convincing them that Apple can get just as many viewers and purchaser's of Hollywood's content as the cable industry can. I have no insight into how much the cable industry pays for content, but I can imagine Apple being able to pay a comparable amount given that Apple doesn't have to worry about as much of the infrastructure required to get it to the user (since the cable industry will still be providing your internet connection).
Remember, the cable industry doesn't control the content, they just control the largest method of distributing that content (and they still will to a large extent given it'll be going over your internet connection), and hence have historically had much more sway with the content industry since they could get the most viewers. As that starts to change with the increasing number of alternatives, hopefully their sway will steadily decrease, so that other players can secure more deals to distribute content in more innovative ways.
That's not to say the cable industry will just let this happen. Why do you think they are starting to brainwash people with data caps? Data caps have nothing at all to do with capacity, and everything to do with the carrier industry maintaining control. Frankly it's identical in the wireless world. If AT&T says that 98% of users never go over 2GB, then why do 100% of users need to be limited to 2GB? Control. This is a not-so-subtle way to get people to pay attention to their data usage, to subliminally get you to watch one less piece of media provided by someone besides the carrier. Case in point, AT&T's U-Verse service, which works over IP, doesn't count towards your U-Verse broadband cap, but any media you watch from a competitor's service (i.e., Netflix, Zune, iTunes), most certainly does.
But, Apple entering this space is certainly a welcome thing by me. The more heavyweights wanting to go toe-to-toe with the carrier industry the better. Hopefully more of these companies will realize where the cable industry is heading and work together to stop it. Netflix and it's public disclosure of carrier caps and whatnot is another step in the right direction, but I think they need to be doing a heck of a lot more than that. Maybe Apple will help get things rolling a bit faster and can shake things up as they did with the music industry.
I do like the idea of an Apple IPTV, but I also don't like it. Apple has no qualms about censoring or restricting content they don't like. So does that mean no Cinemax, no adult PPV, nothing over PG-13/TV-MA?
Be interesting to see what they come up with. I'd be particularly interested to see how an Apple TV solution works with other iDevices. Streaming my live tv to my iPad or iPhone would be an awesome feature and a huge selling point for me
What is the one think that would get people like me (men that like sports) to cut the cable? ESPN, which is a Disney company. Maybe that is what Steve/Apple worked out?
Whether Apple would add dvr functions or provide a cloud dvr function for OTA recording is uncertain. It does not fit into their model, but would certainly hasten adoption if there was no charge for streaming the major networks. Maybe you finally get a la carte cable, $2 a month for amc, etc or just purchase individual shows.
Whether you could add an apple tv box to a system or need a new tv for this is another question. If it could be accomplished by a $99 box, that would make Hulu's business model look pretty shaky. I surf less and less these days. This could be the time for on demand watching.
Give me ESPN and I will give cord cutting a shot!
The biggest problem I see with cord cutting at this time is that in an American household with 3 people (3.2 according to Wolfram Alpha), if they total watch 15 shows a week, if they were to buy them with current pricing from iTunes, that would be 45 bucks a week for HD content. Obviously there are free alternatives, but not necessarily legal or in HD but that has to have been something that was considered by the Apple & TV executives that were involved in this.
Apple needs to do two things at once. Convince program providers that allowing an only streaming option for their content would not eat into existing revenue. At the same time connivence the public that they would not be losing anything by moving away from cable/sat and purchasing a new way to watch.
These seem mutually exclusive no?
The trick to both is content. If there is compelling content, people will watch. Apple has to secure some kind of all you can watch any time you want to watch it, content to attract people to a new device. People do not want to pay per program for content. Unless that price was so cheap as to make it attractive say 25-50¢/show. This seems unlikely. This content does not have to be exclusive it just has to be good. As in good streaming quality and good shows/movies. It also has to be convenient. No more going to this site for movies, using xbox for this, using bluray for that. A content consolidation device. That will attract the consumer. There also has to be some assurance that the service will not fold in a few months.
Getting the consumer to pay something that the providers want will be the hard part. This is where Apple can prevail where other efforts have failed.
Steve, we miss you already.
$0.25-$0.50 per show sounds appealing, but lets do the math. A typical cable provider will cost about $70 for expanded cable and a cable box at full price. In a typical month, that's about $2.34/day. At $0.50 a show, that's a little over 4 shows per day. Factor in that your typically network television show is about a half hour long, that's 2 hours of TV a day at your proposed rates. And, if the show sucks, you can't change the channel.
Even 100 channels broadcasting only 16 hours/day, based on your suggested pricing, would cost $400 per DAY. That's $12,000 per month.
There's way too much greed in the entertainment industry. Multi-million dollar salaries in sports, TV, and movies is passed on to the network, which passes it on to the cable/satellite provider, who pass it on to the customer. At which point, the customer leaves their current provider for a new one, taking advantage of new customer rates (often at a loss to the company). This yearly switch then turns into providers typically only offering discounted rates under a two year contract with a near full rate price hike on year two and huge early termination fees to recoup their loss. Other providers are forced to only offer 2 year deals as well as they cannot afford 1 year of a customer, 2 years without and this at least keeps the same income that they were getting previously from the people who switched every year. Customers then get upset with their satellite and cable providers and go to Hulu and/or Netflix which then further raises costs as networks can no longer rely on traditional income. They then pass this rise in cost along to content providers who are forced to raise their rates (cable/satellite) or otherwise start charging for what was a free service (Hulu).
We as consumers are demonizing and attacking the wrong people, and looking for solutions that benefit those that created the problem in the first place. We SHOULD be going after the networks for price gouging us.
BTW, this -- possibly in combination with iPhones, iPads or iTouch devices (w/Airplay & Siri too?) -- would remove barriers to selection of how we select what to watch, as Apple could meld the touch, compute, lean-back experiences into one. And when (not if) that happens, the content smorgasbord is on.
Cable providers are already at a disadvantage with certain demographics as it is (YouTube, Facebook, Hulu, Netflix streaming content is all portable, and available whenever and wherever I want it) and these companies have been pursuing TV Everywhere strategies to solve for some of this reality for years now.
Apple's biggest opportunity is in disproving the riff, 57 channels and Nothing On (Springsteen, 1992). They can introduce contextual content (family pics/videos & video conferencing--arguably what current Apple TV and FaceTime are best at), alongside Premium iTunes content and some sort of regular subscription viewing (the biggest X-factor in this discussion) in a way that doesn't feel silo'ed or amateur. A world with infinite entertainment choice and control, spun correctly (i.e. made to feel simple), is as powerful as it gets.
This conceptualization of the complete experience is squarely in Apple's wheelhouse and arguably the culmination of ecosystem learnings from Music, Phones and Tablets-- not to mention Computing-- from pioneering in these markets over the past four decades.
Last data point-- Apple has been sitting on the sidelines with a massive cash hoard (amusing story this summer illustrating this point: articles.latimes.com/2011/jul/29/business/la-fi-ap...). Unlike Google (buying Motorola, hundreds of startups) or Microsoft (Skype, many other acquisitions), Apple is likely preserving this dry powder for a massive entry into a market that it will reshape in it's image. I would expect that this money is deployed in a way that generates multiples on it's return. TV is likely that market.