Microsoft rumored to announce subscription TV service as Apple's iCloud looms - Page 2

As I understand it, the deals are not about storage, but about letting folks stream purchases of tv shows and movies that iTunes already has in the system along with more rentals and perhaps a half price streaming only option similar to the LaLa.com ten cent option

When you think about it...

It makes no difference if ATV, GTV, or MSTV gets built into the set -- the content (which is what we're after) comes through the CableCo's STB.

While I would be surprised to see Apple manufacture TVs also, I doubt the first reason will be why. People were saying the EXACT SAME thing about the phone market before Apple released the iPhone.

I think the bigger reason is, as you mention, the low margins, and size. One of Apple's biggest reason for success is their retail stores, where they are already struggling to find room to display their current products. Throwing in a large, low margin product into the mix might be too much for even them to work around.

The licensing might seem to be the best alternative (especially considering that TVs are pretty standard, and there isn't as much differentiation between 2 TVs, as 2 PCs), but Apple's history argues against this (although, history has never been a great guide to judge Apple's future).

I think by now Apple has shown that they can be quite price-competitive in the consumer electronics space. There's no reason to think that an Apple TV would cost anywhere near that much. I'll bet they could compete very aggressively with Sony's mid-high end tv product range while offering an infinitely better user experience, especially when you consider the synergies across Apple's ecosystem.

Some may be content with nothing more than a TV with an Apple box plugged in, but that setup will only appeal to the masses if Apple can provide access to the same selection of programming as the cable companies do at a comparable price. Paying top dollar, a la carte, for a limited selection of iTunes movies and previously broadcast tv shows isn't all that attractive a replacement for cable tv (maybe for some, but certainly not for most.) Also, I'd like control over my tv's settings and options via Apple's interface, not Sony's and certainly not the cable company's remote. One interface, one remote.

I still think Apple will come up with a more satisfying solution than the compromise you describe. Who would have thought five years ago that they would barge into the cell phone market and dominate it?

Considering the XBox had a failure rate of over 50%, I don't think Microsoft had much of a choice, do you?

Two year old Macbook Pro, well out of warranty, no AppleCare. Malfunctioning battery replaced for free on the spot.

Year and a half old iPhone 3Gs, also out of warranty, brought in with malfunctioning audio jack. Replaced for free on the spot.

Friend's wife dropped an iPhone 4 in a bar and smashed the screen. Replaced for free.

Ask around a bit before totally mischaracterizing Apple's level of customer service.

And by the way, "antennagate" was repeatedly proven to be a load of BS, with other leading phones exhibiting the exact same issue depending on where you're located and how you hold the phone. Continuing record sales figures and unmatched customer satisfaction levels for the iPhone 4 despite this supposedly fatal flaw. And still they gave away bumpers for free.

That's a good description of the mobile phone market before 2007.

And befor that year's iPhone launch, Apple partnered with then leader Motorola to release the Rokkr phone. Complete flop, since Motorola obviously had their hands all over its design. Maybe Apple will do the same with Samsung or Sony, before releasing a truly superior TV on their own...

May I suggest you look at the trends instead of just the raw numbers? I'll bet there were some really profitable buggy makers before the Model T came out.

Ya'know, this is truly funny, and true besides.

THAT'S the key. Years ago a federal law required cable companies to support cable cards, an open standard so any device manufacturer could replace the cable company's box. As usual, corrupt politicians never enforced the law and the cable companies now completely disregard it.

"Every facet of its business." Free correction worth every penny charged.

Hey, look! We have a new troll. Aren't filters wonderful?

That's a stupid argument.

Market cap is the market's determination of what a company is worth. It is based on the analysis of millions of investors and what they're willing to pay for a company.

In 1997, Microsoft's market cap was $130 B while Apple's was $4 B.

Today, Apple's market cap exceeds Microsoft's (both are around $230 B).

So Apple's market cap us up 5500% while Microsoft's is up about 80%. What kind of bizarre logic would lead you to conclude that Microsoft has done better than Apple over the past 15 years?

Revenue shows the same trend. Even profits (which is what you are arguing) shows a similar trend. Apple was losing money in 1995 while Microsoft was (IIRC) the most profitable company on the planet.

In 1997, Apple LOST $1 B on about $7 B in revenues. In the same year, Microsoft made about $4 B on $14 B in revenues.

In 2010, Apple made $14 B on $65 B in revenues. Microsoft made $19 B on $62 B in sales. That trend has continued so Apple is now making more than Microsoft.

Aside from the trends which tell an overwhelming story, there's the fact that the overwhelming majority of Microsoft's profits come from products that have been around for 20 years. They're doing nothing to get into significant new markets and are simply living on upgrades. Customers are apparently getting tired of that based on recent trends. (Xbox is the sole significant exception - and it only recently started to turn a profit). Apple, OTOH, has launched a number of new products which reshaped entire industries.

No rational person could possibly argue that Microsoft has been doing better than Apple for the past 15 years.

It's not even close to the same.

Smartphones were still a relatively new market with low penetration. Margins were solid and there was enormous room for growth. Not only was smartphone penetration very small, but the majority of users didn't use their smartphone features because of inconvenience or complexity.

For televisions, OTOH, the market may not be saturated, but it's a lot closer than the smart phone market in 2007. Do you know any homes that don't have at least one TV? Even if you limit it to big screen TVs, the penetration is almost certainly well over 50%. And the usage of TVs is not significantly limited by complexity. Most people who have TVs are already watching them for many hours a day.

This is likely to be a response to moves by Sony to turn the PS3/PSN into the nexus of electronic entertainment in the living room. Microsoft loves following their competitors.

No offence but this is pure BS.

TV's (what you were actually talking about), are primarily marketed to 18-40 year old men? Even if you are talking about X-Box that isn't correct. I found your first remark offensive, and despite the "ha-ha's," this follow up doesn't do anything to ameliorate that.

What Mr. Shaw said:

"Xbox is the gateway to games, music, movies and TV shows in short, it is central to entertainment"

What Mr. Shaw thought:

"Please God! Don't let iCloud take over the world!"

Why not? Many 50" televisions sell for about what an iPhone does without a contract and people don't seem to have a problem buying one of those every year or two just because "They have to". Just say'in.

This just might be why Steve Jobs said this, back in 2007, about the stagnant cable TV + set top box market:

"The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it."

iCloud will be the foundation for whatever Steve and Apple do to innovatively disrupt the stagnant TV market. They're going to do more than just tear up the box.

How about this as an example:

1. Apple does deals with record labels, TV and movie studios for streamed content through iCloud.

2. Apple releases iOS-powered Time Capsule that acts as a home entertainment server.

Boom. Apple leapfrogs legacy cable companies and their set top boxes. Cable companies and TV networks suddenly become dumb pipes much sooner than expected. Apple establishes themselves as the world's premier internet entertainment infrastructure company.

So how would consumers use this technology? Family members would stream content from iCloud through the Time Capsule to any iDevice or Apple TV in the house through AirPlay. If you want to buy a movie and keep it, it would stay on the Time Capsule.

Those are two very simple steps (conceptually anyway). Seemingly inevitable and obvious. And yet the Googles of the world seem to have absolutely no clue.

Nice quote. I'm curious how you (and others) see this as happening. I can't seem to wrap my head around the tv studios not wanting to give up their guaranteed paydays from cable companies for internet-based IP service that still requires the use of the cable company. How does that work with local station programming? Do their affiliates just close up shop? Do the cable companies who were charging for internet and cable for most customers now have to enact even stricter data caps and higher prices because you are no longer getting ABC, BCS, NBC, AMC, TNT. TLC, DISC, etc. from them yet are still using their "series of tubes" to send it to your boobtube?

This nut will crack but I have yet to see a glimmer of anything that shows a fracture worth exploiting. With other products we can see the tides moving. We say the opening a company with resources could take.


On the HW front, some want an Apple branded HDTV which would be nice to remove one single device from the equation, the AppleTV. I can see Apple partnering with TV manufactures to bring the AppleTV to their systems. They've all tried apps on the TV and they all suck.

I could possibly see Apple trying to set the AppleTV between your cable/sat company. Meaning, you still get all your channels from your cable/sat company. This would be a huge undertaking that would just perpetuate the problem, probably not be financially grand for Apple, and would be leaked so fast do to all that involved parties that we know it's coming in two days.

That's the thing, it's the same pipe which is CableCo wants you to watch that same content they have already paid handsomely for upfront and why the TV studios want to keep their big CableCo customers happy, not to mention their local channel affiliates which are both customers and a means of revenue.

Apple is not an ISP and shows no interest in becoming one. You NEED Internet to stream. Unless you are positive that there is chance they are willing to invest in billions in spectrum, infrastructure and additional data centers.

Most Cable Companies ARE ISP's, so they would be relatively fine. In fact they would either raise prices on existing plans to compensate for the loss of their cable sector due to Apple's Anti-Cable stance, or they would cap data usage both of which are very hindering to the idea of streaming.

For those who do less streaming and more downloading, Shows and Movies would Take hours on end and use a large amount of bandwidth in the current state of US broadband.

Apple and Google May HAVE To turn to each other again at some point given Google's rolling out of 1Gb/s internet backbone with specialized fibers to lower bandwidth consumption and apple's need for a competitive, flexible ISP.

My personal thoughts though. Maybe, maybe not.

When I found I couldn't use Netflix without having a Gold Xbox Live account, I literally gave up my Xbox and will ONLY get games that are 1) exclusive and 2) games I really want to play. I bought my Xbox primarily for Forza 3 and Mass Effect 2 (and to prepare myself for the possibility that the next Elder Scrolls only plays well on Xbox).

I shouldn't need to pay MicroSoft an expensive yearly fee to access another fee-based service like Netflix or Hulu - especially when I can get both through the Wii, PS3, computer, iPad, etc. Plus, they don't take debit cards, they only take credit cards to purchase points or a Gold account. I'm swearing off debt and rapidly paying mine down - I will NOT use a service that requires a credit card. Heck, I'd probably give in and pay them for a yearly service and occasional impulse online store games/DLC IF I didn't have to go to Amazon and get a code because they won't take a debit card. Not only that, but when I tried multiple times to input a debit card, the system itself didn't tell me what the problem is, I had to call MS support to find out the answer.

Lastly, my first Xbox360 RROD'd. I shouldn't have been shocked, but I was and am still bitter about it.

Semi OT: When the PS3 network went down it took my Netflix with it. I can't log in to watch so that hastened my decision to buy the Apple TV 2. OH MY GOD! Netflix on Apple TV rocks. The UI is the same as ATV. Add to that the sports packages, and if the NFL and NCAA jump in for football I'm so there.

I could give a flying leap what MS does. Unless it is some major leap from ATV, no way I'll buy an XB just to watch. Oh, and FWIW, the PS3 was just a very expensive toy to play select games with. The other online features never appealed to me much.

Didn't MS make some type of an advance announcement before last year's WWDC? Shouldn't they be focusing on and announcing products that are ready to ship TODAY? Hasn't their marketing department figured out we're onto the "vaporware" trail? This is how Apple broke that lame cycle. Announce only when you're ready and make sure the product will kick serious ass.

I've had Apple replaces TONS of devices, no questions asked. I know of at least five times I took a product in that had issues and they went in the back room and gave me a new one.

As for AntennaGate... get over it. It was never a problem and Apple was simply trying to shut up people who were making it a big deal. Seriously, the iPhone 4 is awesome and I've never dropped a call with it, case or not.

Netflix is now the example I use when people argue that such-and-such has the exact same features as some other electronics HW or SW in name, but only in name.

The Kinnect is an accessory not a consumer electron device.

I hear ya, but according to those that apparently count these things it counts as CE. What they don't seem to consider are other accessory CE. What the trolls and myopic constantly do is forget to include a timeframe with that record. With analysts predicting stock you know it's 12 months unless otherwise stated, but I don't think there is a specific duration limit for any consumer sales.

Being a way to add life a dusty ol' console I can see why it was a success, even if we ignore the cleverness of the accessory, but the curve of its sales have to have fairly soon after it shipped, even for CE. The iPhone, iPad and Mac are still still increasing in sales. I think only the iPod is decreasing and that is offset by the iPhone being an iPod and the iPod Touch taking up a lot of the slack which has plateaued the profits, IIRC.

PS: New Rule: If Kinect gets to account as CE despite requiring an Xbox 360 for all usage then the iPad gets to counts to count as a 'PC' despite requiring a 'PC' for the initial usage.

PPS: I bet after the iPad becomes completely untethered from the 'PC' the analysts still won't change its designation despite that being the primary argument against it.

Anyone who thinks Internet Ready TVs are going to dominate the landscape even within 10 years are fooling themselves.

The bulk of consumers, at least in the US, have yet to even upgrade to an HDTV. They like the concept of using Computers for Net work and TV for Theater entertainment.

You play chess not by positioning your own pieces, but by positioning your opponent's.

Nicely done, Apple.

Oddly for all the great stuff hulu netflix xbox google can do .
Apple TV and Apple App store is a highly polished HD service that is fantastic.
and whats the point of ever leaving itunes ??
i own xbox.netflix.hulu fios their ok i guess .
soon i will drop them all for APPLE SERVICES INC WORLDWIDE IN THE CLOUDS

rock on steve
rock on

9

dude
you rock

9

The Xbox is as powerful in the home as the iPhone is in the pocket. It is Microsoft's last Ace card.

I know I'm just one person, but MS has turned me from an AVID Xbox fanboi with the original Xbox to a 'Never going near them again' hater with the Xbox360.

+++ QFT... Nice!

nice nice i learned something cool today
i will teach my 10 yr tonight when we play .
thanks great advice

peace 9

In case, Apple would be the 'me too. Microsoft said from the beginning they hoped to work out the deals to have this in the US and likely signed up to do an announcement of something at E3 weeks or even months ago.

And at this point Apple nothing subscription for music, movies or tv. And no solid rumors they are planning to for the near future

Doesn't Microsoft always try to announce something pathetic and inferior right before Apple announces the next new thing?

The HP Tablet (that never came to light) before the iPad, for example?

iSnarky

It has protons and neutrons too

Not ridiculous at all. There's a reason why ESPN's carriage fees are 4X higher than any other non-sports cable channel. And why the local regional sports networks' carriage fees are also more than double what the top tier non-sports cable channels charge. More so than any other audience, the sports audience will make decisions about their TV service solely on the basis of whether their channels and teams of choice are included. No other channel or category has that kind of influence, and the cable companies know this.

Just as an example, Comcast Sportsnet carries the Flyers, Sixers, and Phillies games in the Philly market. Because of the so-called terrestrial loophole, CSN Philadelphia is not available on satellite. In the Philly market, satellite penetration is about half the national average. Satellite has more channels, more HD, and arguably better service. But, they don't carry the local RSN, so their subscriber numbers in that market are about half of what satellite typically gets in other markets.

Right now, you have local teams entering into long-term deals with the RSNs with 10+ year terms and dollar values over $1 billion EACH (e.g., the pending deal between Fox and the Dodgers is for 20 years and $3 billion). Again, no other channel or audience category can attain those kinds of content deals.

Even if sports fans comprise only about 50% of the audience, cable/satellite providers know that all they have to do is lock up the sports content and half of their subscribers will not defect. The magnitude of these content deals means that existing blackout rules will still apply, and local teams will remain off of sports streaming sites. And unlike with other entertainment programming, sports is more immune from piracy because the sports audience wants to see the games live and they want it in HD.