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Report: DVR could turn Apple TV into multi-billion dollar business

post #1 of 158
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By integrating digital video recording (DVR) features into Apple TV, Apple stands to transform its niche media hub business into a serious growth driver worth over a billion dollars annually, according to one Wall Street analyst.

Reacting to a patent filing uncovered by AppleInsider on Thursday, American Technology Research analyst Shaw Wu said he sees DVR features like those portrayed in the filing cropping up in a third or fourth revision to Apple TV, turning the device into a real business rather than just a "hobby."

"We estimate AppleTV to be a very minor contributor today at ~0.3-0.4 percent of revenue or $100-125 million annually," he wrote in a note to clients.Â*"We believe adding the ability to watch and record live TV could turn this into a billion dollar, if not multi-billion dollar business."

Wu said the cost of hardware components needed to equip the media box with DVR features is almost negligible, or about $12-15 in incremental cost per unit.
Â*Â*
"We (as well as many others) have been clamoring for DVR and/or TV tuner capabilities since the introduction of Apple TV 1.0 in January 2007 and even Apple TV 2.0 with movie rentals in January 2008," he added. "We are pleased to see Apple listening to customers similar to what it has done with iPhone, with adding native access to Exchange server."

The analyst, however, took pause in his report to note that there have been patent filings from Apple in the past that have not come to fruition "yet."Â*One example, he said, is Bluetooth stereo headsets which have yet to ship but "will at some point as cost of components decline."

Separately, he cited his own sources as saying that Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs.

"Thus while near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals," he wrote. "[We] reiterate [our] BUY rating and price target of $175."
post #2 of 158
I voted "I'd likely purchased" but I really want more information. If Apple goes this route (make AppleTV a DVR), then Apple should buy Tivo. Have two media client set-top boxes: a low-end basic AppleTV non-DVR set top box (something that cost less than $179) and an Apple Tivo product (mid tier and high end).

I also see Apple partnering with Cisco in this realm.
post #3 of 158
Since I don't have an HDTV, Apple TV is of no use to me. Perhaps in a few years I'll get one. When I do, it will require new furniture so it will be an expensive proposition.
post #4 of 158
Quote:
Originally Posted by GuyInFlorida View Post

I voted "I'd likely purchased" but I really want more information. If Apple goes this route (make AppleTV a DVR), then Apple should buy Tivo. Have two media client set-top boxes: a low-end basic AppleTV non-DVR set top box (something that cost less than $179) and an Apple Tivo product (mid tier and high end).

I also see Apple partnering with Cisco in this realm.

Agreed. TiVo is best-of-breed here, widely recognized as the best user experience, and have already explored all kinds of partnerships and technological directions. With the cash on which Apple is sitting, to go the DVR route alone would probably just lead to continued stagnation for the AppleTV product line.

TiVo's market cap is less than 850M. Apple could buy it with chump change.
post #5 of 158
I really hope Apple will take this analyst's advice. It is too great of an opportunity to pass up and will definitely give Apple another piece of the consumer market share. It would also be great if that thing had a super drive in it - or maybe even a Blu-Ray drive.
post #6 of 158
They could just release an add on that works through the USB port on the back just make it optional for people...
post #7 of 158
Nothing like stating the obvious

But I guess without articles like this many on Wall Street wouldn't have a clue.
post #8 of 158
Agreed. Make this another mostly soft update with perhaps the need of a small add-on via one of the rear ports. There may be some additional cost to existing TV owners, but I'm sure most will pay for the added value.
post #9 of 158
I'll believe this when I see it. It's hard to believe Apple would have launched this product in the first place without that feature. I don't see Hollywood greenlighting Apple the rights to record their content. But it would be great.
post #10 of 158
I don't think DVR in itself will do much to help ATV. It may have been different when DVR was rare But today cable companies dominate the DVR market that I'd unlikely to change.

What would help ATV more is to open up to other video download services. Such as Netflix, Hulu, and Joost.
post #11 of 158
Quote:
Originally Posted by AppleInsider View Post


Separately, he cited his own sources as saying that Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs.
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And there you have it. Blu-ray to all Macs- esp the next gen laptops and iMacs. Finally no more discussion on whether there will or why there should not be.
post #12 of 158
Tivo used to be the best experience. I still love them, but here are a few things that make it not the best anymore:

1) No PIP while in the channel guide or other places.
2) Tivo HD/S3 is very slow in many areas.
3) Tivo HD/S3 does not work with SDV. This means I can't even use it here in Austin.
4) Constant bugs in HD/S3 software make it like a 2 year beta project.

I love Tivo, but HD/S3 has seriously made me unhappy with them.
post #13 of 158
Quote:
Originally Posted by teckstud View Post

And there you have it. Blu-ray to all Macs- esp the next gen laptops and iMacs. Finally no more discussion on whether there will or why there should not be.

Not to burst your bubble, but how did, "Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs." come to be, "And there you have it. Blu-ray to all Macs?"
post #14 of 158
Awesome! Throw in a BD-R drive into the AppleTV and there you will have the ultimate entertainment hub IMO...

1) Dowload Music and Movies from iTunes
2) Record Live TV with DVR
3) Burn any wanted TV programs onto BD disc via its BDR drive.
post #15 of 158
Makes sense for Apple to consider this. Given Jobs desire to find ways to include recurring revenue with Apple devices, this would be a built in way to collect consistent, recurring revenue. iTune/iPod provides very inconsistent recurring revenue. Macs provide zero, other than perhaps .Mac. iPhone is obviously the business model of choice, as it provides ongoing, consistent revenue.

DVR functionality would allows AppleTV to generate not only revenue through media sales and rentals as it does now. It would generate another stream of consistent revenue, though less than iPhone on a monthly basis, through a required monthly subscription fee, much as TiVo does now. So, a AppleTV with DVR would give them two recurring revenue streams, which makes it ideal, so long as it is implemented and marketed properly.

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post #16 of 158
Not to burst any bubbles, but there have been "insider reports" for more than a year that Apple has many different configurations of AppleTV already working internally. People have seen AppleTV's with optical drives, AppleTV's with DVR aspects etc. in a variety of price-points and configurations working in a lab somewhere in the depths of Apple HQ.

They do this kind of thing all the time with products, especially when entering a new market. The existence of these working models (and even the patenting of same), does not necessarily imply they will be available for purchase. That's a separate decision.

That being said, the complete failure of their attempts to get any digital content from the media companies might drive them to put optical drives and DVR capabilities on the market in the short term. IMO they are hoping to do an end-run around the traditional networks and echew physical media altogether, but scaling back their aspirations a bit might give them more momentum at this point. Could happen.
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post #17 of 158
I had a roommate with Tivo. It was fine. But once I moved out, I didn't find it worth the service charge for how rarely I used it. If AppleTV had DVR functionality without the service charge, I would use it much more.

I realize ~$13 a month is not a ton, but for how often I would use it, I'd rather buy a few more beers with that cash.
post #18 of 158
Quote:
Originally Posted by TenoBell View Post

I don't think DVR in itself will do much to help ATV. It may have been different when DVR was rare But today cable companies dominate the DVR market that I'd unlikely to change.

What would help ATV more is to open up to other video download services. Such as Netflix, Hulu, and Joost.

Netflix is the undisputed leader of through the mail DVD rentals, but they also have slim pickings for video on demand. The bottleneck is the studios. Apple clearly needs to step up and offer to digitize movies for the studios on their dime, otherwise this will stretch out for an eternity.

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Proud AAPL stock owner.

 

GOA

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post #19 of 158
Quote:
Originally Posted by Akac View Post

Tivo used to be the best experience. I still love them, but here are a few things that make it not the best anymore:

1) No PIP while in the channel guide or other places.
2) Tivo HD/S3 is very slow in many areas.
3) Tivo HD/S3 does not work with SDV. This means I can't even use it here in Austin.
4) Constant bugs in HD/S3 software make it like a 2 year beta project.

I love Tivo, but HD/S3 has seriously made me unhappy with them.

So what DVR is better? It's sure not the ones supplied by the cable or FiOS companies.
post #20 of 158
Quote:
Originally Posted by TenoBell View Post

What would help ATV more is to open up to other video download services. Such as Netflix, Hulu, and Joost.

Not going to happen. This would be like saying the should have opened iPod to other paid music services. You could argue that this might have increased iPod market share, but it definately would have eroded the additional revenue stream. Obviously, as with iPod/iTunes, if you build a compelling eco-system, you don't need to open it up to drive the device sales and you keep your recurring revenue. Apple is all about value-added products now to revenue above ticket price of the device.

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...sometimes it's both
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"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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post #21 of 158
I put "i'd probably get one" but really I'm more inclined to "check it out" as posted above, I'd need more info.

My current DVR has twin tuners, so records 2 programmes at once while watching a recording, or even watching a third channel as long as its on the same Mux as one of the other channels.

So THATS what Apples gotta beat for me to bite. I can't see them doing that in a 1st Gen product.

I've also got a 160GB drive 3.5" and its "big enough" but I'd be happier with 250GB or above, given Apples pursuit of "as small as possible" that will mean a 2.5" drive as currently in the aTV which will add to the overall cost of the unit, at anything approaching a useful amount of recording time.

My DVR only has recordings on it, no photos, no music (well a little off the digital radio) and knowing the way I like my aTV filled up to near capacity with a variety of content I'm not so sure a 250Gb drive would cut it!

unfortunately thats a lot of boxes not ticked.

the only thing they might win out on is on interface, and I just cant see that happening either, the REAL golden shot for a good PVR is series linking and rapid searching of the EPG nail that and make it a pleasure and you have something, unfortunately if one has to constantly juggle with recordings/disc space, then the experience becomes a pain in the backside.

All this assumes a stand alone device working independent of any computer..

Integration with iTunes and the net also could more than likely add pluses.

by all means "bring it on" and let us see what its capable of
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post #22 of 158
Quote:
Originally Posted by TenoBell View Post

I don't think DVR in itself will do much to help ATV. It may have been different when DVR was rare But today cable companies dominate the DVR market that I'd unlikely to change.

What would help ATV more is to open up to other video download services. Such as Netflix, Hulu, and Joost.

I agree. Lots of us have service that we are happy with. My FIOS is great overall. It has a DVR. The only thing is that they need to download better search software.
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post #23 of 158
The Apple TV would need to be seriously re-engineered to be a DVR. While 160GB might be enough to hold what you want to rent for the night or weekend, its way insufficient for true HD DVR functionality. That's only providing ~20ish hrs of HD programming.

A DVR needs alot of space to really shine. I hope Apple goes down this road, but the device in its current form would only really be useful for DVR'ing at standard def because its hard drive sizes are way too small at HD except for the renting model.

To the user who said the Tivo HD Series 3 doesn't work with Standard Definition, that is incorrect.

I actually have a Series 3 HD Tivo hooked up to standard definition (non digital) cable only (not cable cards) and outputting to a SD TV. It does this beautifully and provides dual tuners on the single cable input. I have this current config as Tivo was offering a lifetime program on the HD Tivo for a limited time and I knew I'd be getting one eventually - lifetime makes it so you don't pay monthly service charges for the TiVo. ;-)

Just my $.02...
post #24 of 158
Quote:
Originally Posted by Booga View Post

So what DVR is better? It's sure not the ones supplied by the cable or FiOS companies.

The current DVR market is kind of like the pre-iPod mp3 player market, every entry sucks. Even Tivo is no way near Apple quality, and the engineers as Scientifica Atlantica should be shot for producing the hunk of crap that Time Warner uses.
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post #25 of 158
Quote:
Originally Posted by teckstud View Post

... I don't see Hollywood greenlighting Apple the rights to record their content...

In what ways do the rules differ for Apple compared to Tivo or the various ISPs' DVRs? The devices would record the same content, for the same replay purposes.

On a different part of the issue, one post here said Wu's simply stating the obvious, while another referred to considerable argument that DVRs' days are limited. You and I as consumers would be happy with another dramatically improved Apple device we could get pleasure from for 2-3 years; as a stockholder, i want the company's management to make the right decision for allocating its cash reserves, its R&D resources, and its reputation. On the one hand the company seems in an unenviable position where hundreds of millions of dollars--Wu says maybe billions--are at stake and we all await a critical decision. On the other hand, Apple survived the Newton, the Cube, and ( ________ fill in your favorite example here). I used to have a boss who preached that if you're not trying some ventures that fail, you're not trying enough, and that argument could be applied here.

At any rate, nothing simple about the situation. But it sure is engaging to anticipate the outcome.
post #26 of 158
Quote:
Originally Posted by TenoBell View Post

I don't think DVR in itself will do much to help ATV. It may have been different when DVR was rare But today cable companies dominate the DVR market that I'd unlikely to change.

In some ways, that's like saying everyone has a computer, there's no point in trying to sell them a better one. But there are problems because in some ways, it would require CableCard to do it well, and the word seems to be that CableCard is horrible, in standard and implementation.

But I would like a better Mac-based PVR. The EyeTV devices I have have are a bit flaky & crashy. I think my one of my Hybrids just died last week. I didn't try to trouble shoot it, I happened to have a spare that I used instead just to get it going again.
post #27 of 158
Quote:
Originally Posted by Abster2core View Post

Not to burst your bubble, but how did, "Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs." come to be, "And there you have it. Blu-ray to all Macs?"

Because next to "Wall Street Analyst Shaw Wu" he's the premiere source of inside info of the future of Macs.
post #28 of 158
Quote:
Originally Posted by tacojohn View Post

They could just release an add on that works through the USB port on the back just make it optional for people...

I think that this is a great solution. It won't piss off everybody that has already bought the AppleTV.
post #29 of 158
Quote:
... I don't see Hollywood greenlighting Apple the rights to record their content...


Quote:
In what ways do the rules differ for Apple compared to Tivo or the various ISPs' DVRs? The devices would record the same content, for the same replay purposes.

I dont know if there are any contractual limitations on the ability of Apple to provide a DVR service but...they are trying to sell video content through the iTunes store. Who is going to buy South Park episodes when the same interface can just snag it for free using DVR?

I personally think this patent filing is complete hedge. On one hand it is a direct threat aimed at the studios, and on the other it is a way to proceed if the studios drag their feet much longer.
post #30 of 158
Quote:
Originally Posted by GuyInFlorida View Post

I also see Apple partnering with Cisco in this realm.

That would be unlikely, because Cisco owns Scientific Atlanta,
which is a major set-top box manufacturer.
post #31 of 158
I hope it comes out before the Feb 2009 change over as I need to buy a new DVR because of the changer over as my old DVD-R recorder will not work in 2009...

Hope Apple make it able to record several shows at once on over the air TV for those of us who do not have cable.
post #32 of 158
Quote:
Originally Posted by zanshin View Post

Because next to "Wall Street Analyst Shaw Wu" he's the premiere source of inside info of the future of Macs.

No - because like 1 plus 1 equals 2?
post #33 of 158
Quote:
Originally Posted by dmfett View Post

I hope it comes out before the Feb 2009 change over as I need to buy a new DVR because of the changer over as my old DVD-R recorder will not work in 2009...

Hope Apple make it able to record several shows at once on over the air TV for those of us who do not have cable.

Depending on your DVR, I think you can hook up your DVR to one of the new DTV converter boxes. You would have to have one per tuner to do a multi-tuner setup.
post #34 of 158
Quote:
Originally Posted by Abster2core View Post

Not to burst your bubble, but how did, "Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs." come to be, "And there you have it. Blu-ray to all Macs?"

By all Macs I mean the product line not literally every single MAC- duh!
post #35 of 158
Quote:
Originally Posted by Abster2core View Post

Not to burst your bubble, but how did, "Apple and Sony appear to be in the final negotiation stages of bringing Blu-ray to Macs." come to be, "And there you have it. Blu-ray to all Macs?"

Why are you so resistant to a blu-ray drive? You really need to get over it. Were you this reluctant when CD drives became DVD drives? Or when CDs bypassed tape? The more information you can record - the better. Why be so negative all the time. Embrace change.
post #36 of 158
Quote:
Originally Posted by teckstud View Post

By all Macs I mean the product line not literally every single MAC- duh!

Like hell. All literally means every!
post #37 of 158
In looking at the report on the patent filings, the images of an iPod-like remote got me to thinking that a DVR version of the Apple TV would provide a great opportunity for further device integration.

I currently have a DVR/cable box from my digital cable provider that has about 50hours recording time in it (which is enough for me). What I hope for is an Apple TV that I could not only use to purchase or stream content from my Macs, but also use as my digital cable tuner.

Now consider the remote. Seems to me that nothing would be more perfect than for Apple to add remote control functions to the iPhone and iPod Touch that would allow users to control an Apple TV (or Mac for that matter) with the simple touch of an icon on the screen. Touch your iPhone or iPod screen to bring up a user-friendly menu to control video playback from the ATV or your Mac.

Something along these lines would suddenly integrate the Apple hardware in a way that could almost entirely remove other equipment from your living room.

As an example, I've already done away with my DVD player by attaching my Mac mini directly to my 32" Sharp flat-panel TV. I play all my movies on the mini's DVD drive; I ditched my stereo and now play all my music digitally via my Mac mini from iTunes libraries on other Macs in my house through Airport Express. The only non-Apple harware left in my TV stand is my cable provider's tuner...it sure would be nice to ditch that too, in favour of an Apple TV/DVR.

Apologies if I haven't explained this well, but I'm convinced that this type of a strategy would provide many great new opportunities for Apple.

Cheers.

Ps. Similarly, I think Apple missed the boat with its iPod Hifi; the unit should have also included an Airport card that would have allowed people to stream their iTunes libraries to it or plugged their iPod into it and taken it on the road. There's lots more for Apple to do in the living room....I just hope they get to it soon.
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post #38 of 158
Quote:
Originally Posted by teckstud View Post

Why are you so resistant to a blu-ray drive? You really need to get over it. Were you this reluctant when CD drives became DVD drives? Or when CDs bypassed tape? The more information you can record - the better. Why be so negative all the time. Embrace change.

I am not resistant to Blu-ray. My point has always been that you and a few others always jump on Apple for no reason at all. As I pointed out a number of times, Apple is not the culprit here. As yet there is no product, driver, or configuration, available or priced properly to fit Apples product line.

You really need to get over dissing Apple at every turn. And I do mean literally all the time.
post #39 of 158
Quote:
Originally Posted by Abster2core View Post

Like hell. All literally means every!

Not in the phrase "All for one and one for All" in its original context it ment 4 so "All" = 4

So.. that'll be the Mac pro, the Mac Book Pro, the iMac and the Mac Book.

go on, I double dare you to be pedantic
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post #40 of 158
Quote:
Originally Posted by Abster2core View Post

I am not resistant to Blu-ray. My point has always been that you and a few others always jump on Apple for no reason at all. As I pointed out a number of times, Apple is not the culprit here. As yet there is no product, driver, or configuration, available or priced properly to fit Apples product line.

You really need to get over dissing Apple at every turn. And I do mean literally all the time.

Bud- I don't diss Apple all the time. What is your problem? I will be very happy when they get a blu-ray drive that records the files that I have made using Apple's excellent application called iMovieHD. Get over it. \
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