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Wall Street views new Apple TV as small step, not living room revolution

post #1 of 87
Thread Starter 
While the new Apple TV was given the coveted "one more thing" slot in Steve Jobs' keynote Wednesday, the product will "continue to play second fiddle" to the iPods that were introduced, analysts on Wall Street believe.

Apple was busy at its media event on Wednesday, introducing a number of products including an updated iPod touch with Retina Display and forward-facing camera, dramatically redesigned iPod nano with multi-touch display, new iPod shuffle with buttons, and a cloud-centric $99 Apple TV. On the software side, the company also announced that iOS 4.1 is coming Sept. 8, iOS 4.2 will add wireless printing and AirPlay in November, and also released the new iTunes 10 with the Ping social music network.

By and large analysts on Wall Street came across pleased with Apple's new product lineup, which they think will be a strong seller this holiday season.

Needham Research

Analyst Charlie Wolf said he believes the highlight of the event was the iPod touch refresh, which added front and back cameras and a microphone to the portable media player, along with the A4 processor and Retina Display previously found in the iPhone 4.

He also noted that the price of the Apple TV was drastically reduced from $229 to $99, while TV rentals will now cost 99 cents. Despite these pricing changes, Wolf believes the Apple TV will remain a niche product among Apple's strong lineup.

"In our opinion, however, Apple TV will continue to play second fiddle to the iPod, iPhone and iPad," he wrote.

Wolf has maintained his price target of $375 for AAPL stock with a buy recommendation for investors.

Piper Jaffray

The new Apple TV is a "step in the right direction," analyst Gene Munster said. He has long believed that Apple will inevitably release a full-fledged connected HDTV set.

Munster believes Apple has been selling about 400,000 Apple TVs a year. He expects sales to nearly quadruple, to 1.5 million in fiscal year 2011, adding $50 million in revenue.

"We see the new Apple TV as a meaningful change in Apple's efforts in the digital living room," he wrote. "The addition of new content, such as Netflix, in combination with the $99 price (down from $299) will drive higher unit volumes compared to the previous version of Apple TV." However, he noted that the system is still "light on content."

Oppenheimer

Though the new Apple TV doesn't run App Store software like other A4-powered devices, analyst Yair Reiner sees the new product as strengthening the presence of iOS in the living room for another reason: AirPlay. Apple's upgraded wireless media streaming technology will allow users to stream videos and photos from their iPhone, iPad or iPod touch to an HDTV connected to the Apple TV.

"The new Apple TV, while unlikely to move Apple's bottom line much, is poised to provide iOS a growing foothold in the family room, a development that could open the door to further long-term opportunities while also boxing out wold-be rivals such as Google," Reiner wrote.

The analyst also said the iPod touch "graduated" from being a game and media device to a full-fledged social media service. And he believes Apple gave users the best reason to upgrade their iPod nano in years.

"Most of the cats had snuck out of Apple's bag in the weeks prior to today's iPod event, but that shouldn't obscure the bottom line: Apple has let loose some mighty cool cats," he wrote.

Gleacher & Company

Though the Apple TV is a "dramatic improvement from its 2006 origins," analyst Brian Marshall said, he's still waiting or a device that runs iOS and allows users to run applications in the living room. He does agree with Apple, though, that the future of content will be rentals instead of ownership.

Marshall heaped praise on Apple's new Ping social media service, which he believes could drive increased content purchases through the company's product ecosystem. Particularly, the 160 million active credit card users make a great starting point for the company's social networking initiative he said.

"While we were impressed with the iPod and Apple TV refreshes, in our view, Ping stole the show and represents AAPL's maiden voyage into the uber growth world of social networking," he said.

Still, Marshall thinks the single most important factor for Apple in the next 12 months is the international ramp of the iPhone. He also believes that 70 percent of the company's gross profits in calendar year 2011 will come from two products: the iPhone and the iPad.

Kaufman Bros.

Analyst Shaw Wu called the Apple TV announcement "underwhelming," and said that the new product will remain a "hobby" for the Cupertino, Calif., company. He said the product feels like a "work in progress" due to its limited features.

"The main capability we were hoping for was the ability to run apps from the iTunes App Store and it looks like AAPL decided to leave this out for now," he wrote.

But because the new device runs the same A4 processor as the iPhone, iPad and iPod touch, he said it "should be fairly easy" for the company to add the App Store to the new product in the future.

Wu also said he found the iTunes Ping social media service to be the "most intriguing" announcement Wednesday. He believes the addition will make iTunes even more successful by having it serve as a hub of interaction for people to connect with friends and recording artists.

"Today, users to go Twitter, YouTube, Facebook and MySpace to follow their favorite artists," Wu wrote. "With Ping, it is simply easier."
post #2 of 87
Yup, Steve Jobs stated as much publicly within the last week. It's about small steps and working on studios to come round, while at the same time reducing the price point and building the user base to help convince the studios.

Great repetition there, sorry - 'analysis'!

Oh, and apple will NEVER release an integrated TV set. It blows away all of their models and the hope that customers upgrade their equipment at least once every 18 months - if a TV was available at £1000 + then it's a major purchase, and not one that has a reasonable upgrade cycle potential.
post #3 of 87
Quote:
Originally Posted by AppleInsider View Post

While the new Apple TV was given the coveted "one more thing" slot in Steve Jobs' keynote Wednesday, the product will "continue to play second fiddle" to the iPods that were introduced, analysts on Wall Street believe."

Second fiddle? If anything, the iPod is second fiddle to the iPhone. Apple TV isn't even a member of the band. More like some guy sitting on the sidelines banging a tin can against the floor.
post #4 of 87
Sure it's a small step. But at a hundred bucks, it also becomes an impulse buy. I suspect Apple at this time is more interested in shipping product than in breaking through any innovation barriers.

That said, it's a decent product. Plug it into a TV and you've got a nice little media server. Nothing wrong with that.
post #5 of 87
I'd love that new Apple TV if only it was usable in Europe (The Netherlands for me).
Europe has too many countries and too many different goverments that all have their own saying on payments, rights etc that I will never be usable I am affraid.

This new Apple TV would make me sell my HDD recorder.
Only use it to record some shows on saturdaynight anyway.
And channels here seem to stop shows after 10 episodes if they aren't watched enough properly. Meaning I have to download the rest.....
post #6 of 87
Quote:
Originally Posted by xSamplex View Post

That said, it's a decent product. Plug it into a TV and you've got a nice little media server. .


Does it handle common codecs? Or is it as limited as the iPad?
post #7 of 87
What people seem to be missing is that the AppleTV is not -- and should not -- be a self-contained device. It's a way to add a big screen to any of your other iDevices without a cable. Why replace your existing iDevice? Just augment it.

This is the best way to increase sales, rather than cannibalize.

Watching movies over AirPlay is just the first step. HD gaming is the next step. Can't you see it? Tap a button to broadcast your game to a 42" big screen!

Why do you think they called it Air*Play* ?

Steve didn't announce it because no games can take advantage of it, yet. It's likely it's not quite ready, yet. There are lots of details around multi-player gaming, including screen hand-off, etc.
post #8 of 87
All I want to say is there also should be Ping movie and Ping book.
post #9 of 87
well this might be a small step , but its small step in right direction , would love to have hulu on it .
Quote:
Originally Posted by unscriptable View Post

Why do you think they called it Air*Play* ?
.

well you can also "Play" music or a movie .
post #10 of 87
Quote:
Originally Posted by unscriptable View Post

What people seem to be missing is that the AppleTV is not -- and should not -- be a self-contained device. It's a way to add a big screen to any of your other iDevices without a cable. Why replace your existing iDevice? Just augment it.

This is the best way to increase sales, rather than cannibalize.

Watching movies over AirPlay is just the first step. HD gaming is the next step. Can't you see it? Tap a button to broadcast your game to a 42" big screen!

Why do you think they called it Air*Play* ?

Steve didn't announce it because no games can take advantage of it, yet. It's likely it's not quite ready, yet. There are lots of details around multi-player gaming, including screen hand-off, etc.

Good point.

To me the $99 Apple TV is essentially an iPod/iPhone accessory. Thought of that way, it's an awesome deal.
post #11 of 87
Quote:
Originally Posted by Newtron View Post

Does it handle common codecs? Or is it as limited as the iPad?

If you mean common codecs as used by ilegally downloaded files in mkv format, then no.
Apple TV, and just about any other Apple product, is not meant for the power user imo.
And therefore Apple will never support formats and codecs used by those power users.

In a way this sucks, but if you use the Apple TV, and iTunes, in the way Apple advertises it to use you don't have a problem.
post #12 of 87
Quote:
Originally Posted by xSamplex View Post

Sure it's a small step. But at a hundred bucks, it also becomes an impulse buy. I suspect Apple at this time is more interested in shipping product than in breaking through any innovation barriers.

That said, it's a decent product. Plug it into a TV and you've got a nice little media server. Nothing wrong with that.

If there is audiophile-grad DAC that accept audio feed through HDMI (it's mostly USB presently) then this could be a perfect music player for audiophile. Think about it. Cool & quiet means almost non-existent jitter. Stream your lossless music from LAN, voila!
$99? What a steal!
post #13 of 87
Apple TV hopefully will go iOS next year. I think Apple is playing the waiting game and get most content providers on board before they go all out on AppleTV.
post #14 of 87
It's a convenient box, but as long as Apple is married to 720p, their digital hub dream will remain a 'hobby.'

1080p is the standard and has been so for several years.
post #15 of 87
Wall St is wrong.

This will be a hit - make no mistake.

At this price loads of iPhone/iPad/iMac users will finally say - hell now it's worth switching over/spending a bit more and getting (a) an additional media player to their Sony PSX or just getting a media centre... just watch guys - money talks. :-)
post #16 of 87
I see it like this:
If you want to pay for quality HD content, watch your favorite shows on you TV instead of you monitor, etc, Apple TV is awesome and a buy.

If you want to watch for free from dubious sources or commercially supported like Hulu, then clearly Apple TV is not a buy.

Since for most people cancelling cable is not an option, any additional settop box to pay for is simply an additional burden. Hence the lack of sucess for these boxes. Steve has explained this and understands this. Among the wealthier or techier crowd Apple is sure to be a hit but competition is not far behind. $99 price tag will surely help.

If Boxee box launches I think I would rather get it, because it would allow me to get shows from hulu, netflix, Revision3, and many other sources like CBC, BBC, etc But you guys know about all this so am not gonna list out all the features. I am still looking to see what google will announce as well.
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post #17 of 87
Quote:
Originally Posted by AppleZilla View Post

It's a convenient box, but as long as Apple is married to 720p, their digital hub dream will remain a 'hobby.'

1080p is the standard and has been so for several years.

Its not a standard on Virgin or Sky thats for sure. most of the stuff I get from them is SD and what is HD is mostly 720, and compressed to hell.

The best HD picture I get is via Freesat BBC HD and thats a free one!
post #18 of 87
Quote:
Wall Street views new Apple TV as small step, not living room revolution

I should sure as hell hope they do; it's exactly the same in functionality as the old Apple TV, except for the addition of Netflix streaming which nearly everyone already has available to them via a game console, blu-ray player or their television itself.
post #19 of 87
that Apple TV is more of an upgrade than a revolution. But it is a significant upgrade. From the broadcast(and maybe I misheard), it seems like Apple was just listening to what present AppleTV users were wanting from a new device and gave it to them. I wonder(and am guessing that they did go to others as well) if they went to people were thinking about Apple TV and asked what would it take for them to buy one. I am not sure if I will try out an Apple TV or not but if I do, I will probably get a netflix subscription with it to try to keep the costs somewhat more reasonable. I would probably only buy TV episodes of the shows that I like and missed an episode and not watch whole series. In those cases, it is more convenient, to me, to just buy the dvd set when they come out at the end of the season.

I also agree that the big step on the iPod front was the iTouch getting the cameras although I also would have liked them to have given the option for a 3G connection, but maybe that will be saved for next year or for a smaller sized iPad. I actually think that the game center will be huge and will solidify the touch as a gaming device. This will be a great thing to push more games to come to iOS. The touch and the iPad will be the things to have this holiday season if everything works as expected.

I like the new shuffle. I might pick another one up since I have not been able to find my second generation one. Not having the controls on the shuffle would have been a problem for me. The nano is the one piece of the whole puzzle that I am not sure of. It seems like that they made it a shuffle with a screen. I see that they did away with the camera which they probably didn't need anyway. I like the way they made it a clip on. But because they made it more shuffle like, I was thinking that maybe they should have made the introductory price at $99.

Overall, I am pretty happy with what was introduced. I think the Apple TV, while not perfect, will sell fairly well but its main purpose is to cement iTunes position as the go to place for home entertainment. The touch, with the new advancements in iOs such as game center and airplay, will be a great way to share media and gaming and will allow the touch to keep on selling well and I think will make it the sought after handheld gaming device. The shuffle will continue along its niche and do ok. Just not sure where the nano will fit in and how well it will sell. It probably will do ok since it is now a clip on and will be easy to work out with and seems to be iOs based and could be for those that don't want all the functionality of the touch.

One last point. I have seen some calls for Apple to buy Netflix. Don't think that will happen for 1 main reason. I don't think the studios will contract with an Apple owned Netflix. I feel they already think that Apple is too powerful and if they bought Netflix, I am sure some studios would do things that would put an Apple owned Netflix at a disadvantage.

Neal
post #20 of 87
Quote:
Originally Posted by malax View Post

Good point.

To me the $99 Apple TV is essentially an iPod/iPhone accessory. Thought of that way, it's an awesome deal.

I'd rather buy a $5 cable on eBay, plug it into the HT system, and crank the tunes or the video or whatever.


$99 seems crazy for the uses you desire.
post #21 of 87
Who cares what Wall Street thinks about Apple's new line-up? I am far more interested in what Consumers think.

IMHO, the only true innovators and visionaries in the IT industry are Apple and Google. The rest are poseurs by comparison.

I'm a twenty-five year Apple fan-boy because their products 'just work'. To be more specific, my entire personal and professional life is vertically integrated because all Apple products work well together. I amplify them with Google products, and I now have unparalleled power to live according to my own lights.

There will always be nay-sayers (just witness the current American political malaise), but it is always easier to complain than to light the way. Apple continues to light the way.
post #22 of 87
Quote:
Originally Posted by Prism View Post

If you mean common codecs as used by ilegally downloaded files in mkv format, then no.
Apple TV, and just about any other Apple product, is not meant for the power user imo.
And therefore Apple will never support formats and codecs used by those power users.

In a way this sucks, but if you use the Apple TV, and iTunes, in the way Apple advertises it to use you don't have a problem.

That strikes me as akin to going to the car dealer (instead of the local place) and paying $50 for an oil change. Some folks are content to just go see Mr. Goodwrench, for the convenience and peace of mind.

That's all fine. But that is nothing I want to be involved with.

I prefer quality and price over convenience. For example, I like to barbecue. A pork shoulder can take 16 hours to cook, and you have to be attentive to the fire at all times.

But it tastes better than getting Lloyd's barbecue crap at the supermarket.

Many other things are like buying/renting low-rez videos - because they are more convenient, people will pay more and get less. Me, I strive for great quality at great prices.
post #23 of 87
Quote:
Originally Posted by matrix07 View Post

If there is audiophile-grad DAC that accept audio feed through HDMI (it's mostly USB presently) then this could be a perfect music player for audiophile. Think about it. Cool & quiet means almost non-existent jitter. Stream your lossless music from LAN, voila!
$99? What a steal!


Most high quality home theater setups include a good quality DAC. Most of them accept HDMI input.

People have been hooking up their iPods to good quality DACs for ages. The old ones used to hold a lot of data, so it was a practical storage medium.
post #24 of 87
Quote:
Originally Posted by AppleZilla View Post

It's a convenient box, but as long as Apple is married to 720p, their digital hub dream will remain a 'hobby.'

1080p is the standard and has been so for several years.

i don't think the majority really care. 720 is fine.
what is a bust is the limited functionality of the box. it just doesn't allow enough web functionality/access.
post #25 of 87
I like the price. This way, when you find out all the things it can't do under iOS, it will hurt less.
post #26 of 87
Quote:
Originally Posted by Newtron View Post

Most high quality home theater setups include a good quality DAC. Most of them accept HDMI input.

People have been hooking up their iPods to good quality DACs for ages. The old ones used to hold a lot of data, so it was a practical storage medium.

Most audiophiles won't hook up their audio feed to home theater system. They prefer to hook it up to high grade standalone DAC connected to analogue power amp of their choices. There's a lot of reasons for that.
post #27 of 87
Quote:
Originally Posted by screamingfist View Post

what is a bust is the limited functionality of the box. it just doesn't allow enough web functionality/access.

Yep. The iOS iTV with Siri apps specifically for iTV to search contents on the web would beat GoogleTV hands down.
post #28 of 87
THis concerned that the APple TV does not support common video codecs beyond Apples favorites must keep in mind that this was the case with the other iOS devices too. No there are many video servers applications for your desktop that transcode to friendly formats on the fly. It won't be long before these pop up for the Apple TV too. Especially if the next SDK includes support for development on Apple TV. It's just a matter of time. Yeah, the first version will be closed, but that won't last. Plus most people are focusing on streaming from iOS devises and missing the desktop streaming from iTunes. If you can re-encode it yourself you can drop it into iTunes and it will work. An extra step, but still it works.
post #29 of 87
I think on the outside the new AppleTV fail to be a killer hot product. It would have needed an AppStore to achieve that status. Note that since that thing is power by the A4 chip, anything could happen on future updates.

BUT, the thing is I think it does have a “killer” app with AirPlay and with pricing. AppleTV fits very well in the iDevice echosystem and with a price so low at 99$ (A iDevice to TV cable sell for 50$), then may start selling millions of those things after all.
post #30 of 87
Quote:
Originally Posted by Newtron View Post

Does it handle common codecs? Or is it as limited as the iPad?

All Apple devices play codecs that commercial media comes in. This is the same practice that Microsoft and many Linux distributions adhere to. The "common" codecs and containers you refer to are .mkv, DivX, and Xvid, which about 99% of all pirated media and 0% of all legitimate media use. If you're really that upset that you can't play your most-likely-pirated content on Apple's devices, then just send it through an app like HandBrake or VisualHub and it'll play just fine.
post #31 of 87
Quote:
Originally Posted by Newtron View Post

Does it handle common codecs? Or is it as limited as the iPad?

Handbrake + Identify = AppleTV best HTPC in the world. Your video are going to look exactly has you bough them on Itunes, complete with fanart and full description.

or if your are talking about home made video, the little thing support motion jpeg avi videos, which is on many cameras.
post #32 of 87
Apple TV is running an A4 and likely a variant of iOS. The iPhone didn't ship with an app store, neither does Apple TV. That doesn't rule it out in the future though.

Right now I'm most interested in the capabilities of AirPlay. Hopefully it will be able to stream video from more than just the iPod app on the iPhone and iTunes on the computer. I'd love for third party apps to be permitted, but not expecting it.

I ordered one, it's cheap enough for me to play around with now and Netflix is coming to Canada soon.
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post #33 of 87
Quote:
Originally Posted by Newtron View Post

Does it handle common codecs? Or is it as limited as the iPad?

It handles common codecs as does the iPad and iPod. As the biggest selling devices of their type on the planet, everything they include is "common".
post #34 of 87
Quote:
Originally Posted by AppleZilla View Post

It's a convenient box, but as long as Apple is married to 720p, their digital hub dream will remain a 'hobby.'

1080p is the standard and has been so for several years.

I see, and would you care to list a single streaming provider who streams in 1080, or a single telecoms company that would provide high enough bandwidth to allow that?

PS. 1080 isn't a standard, it's one of an option of resolutions, all of which are referred to as HD, which includes 720.
post #35 of 87
Quote:
Originally Posted by nkhm View Post

I see, and would you care to list a single streaming provider who streams in 1080, or a single telecoms company that would provide high enough bandwidth to allow that?

PS. 1080 isn't a standard, it's one of an option of resolutions, all of which are referred to as HD, which includes 720.

But you don't understand -- anything less than 1080p isn't fully geek-compliant, and therefore is an instant fail!
Please don't be insane.
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Please don't be insane.
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post #36 of 87
Unfortunately I don't see the Apple TV making it so far in the UK (possibly Europe as a whole). Mainly because we'll still end up behind the US on the TV shows, there's no point in this if all you can rent are shows that were on TV in the US a year ago, especially when you they're often available illegally at the same time. This isn't really Apple's fault, it's the studios and the TV companies, but it will mean there's little point in buying an Apple TV over here.
post #37 of 87
Quote:
Originally Posted by AppleZilla View Post

It's a convenient box, but as long as Apple is married to 720p, their digital hub dream will remain a 'hobby.'

1080p is the standard and has been so for several years.


But not for downloads. There are no codecs for making a 1080p file at a size that is reasonable for all to download. Too many choked lines and caps.

In another couple of years when we can have a 'blu-ray' download at a 720p size, perhaps even in Extras format with all the special features and such, then it will be time to talk smack at the folks still serving up only 720

A non tech's thoughts on Apple stuff 

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A non tech's thoughts on Apple stuff 

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post #38 of 87
Quote:
Originally Posted by unscriptable View Post

What people seem to be missing is that the AppleTV is not -- and should not -- be a self-contained device. It's a way to add a big screen to any of your other iDevices without a cable. Why replace your existing iDevice? Just augment it.

This is the best way to increase sales, rather than cannibalize.

Watching movies over AirPlay is just the first step. HD gaming is the next step. Can't you see it? Tap a button to broadcast your game to a 42" big screen!

Why do you think they called it Air*Play* ?

Steve didn't announce it because no games can take advantage of it, yet. It's likely it's not quite ready, yet. There are lots of details around multi-player gaming, including screen hand-off, etc.

Good points.

I said a few weeks ago that I thought that AppleTV would morph into something like AirportExpress because it makes sense. Apple is a hardware company not a content company. iTunes and AppleTV only exist to enhance the attractiveness of the iOS devices, which is where Apple makes it's profits. The big news here is that you can store your music/movies/tv on your iOS device and stream it wirelessly through AppleTV onto your TV. If you have a large library stream it from your computer instead. I think in future they may add the ability to store/stream content from your TimeCapsule, making it a sort of home media content hub.

The point of AppleTV is that it enhances your other Apple products in a neat eco-system rather than providing a way of replacing your cable box.
post #39 of 87
Quote:
Originally Posted by drdb View Post

Unfortunately I don't see the Apple TV making it so far in the UK (possibly Europe as a whole). Mainly because we'll still end up behind the US on the TV shows, there's no point in this if all you can rent are shows that were on TV in the US a year ago, especially when you they're often available illegally at the same time. This isn't really Apple's fault, it's the studios and the TV companies, but it will mean there's little point in buying an Apple TV over here.

Not to mention it costs 52% more than it should here and dosnt even have iPlayer
post #40 of 87
Quote:
Originally Posted by Joe hs View Post

Not to mention it costs 52% more than it should here and dosnt even have iPlayer

Why does it?

Add sales tax and import duty to the US prices, then do a commercial rate conversion (not tourist rate you buy your dollars for down at the high street) and you'll see it's about right.
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