Software remains Apple's secret sauce of success - analyst
Despite of flurry of new iPods and other digital media announcements made by Apple Computer on Tuesday, its most significant introduction was a dramatically improved version of its iTunes software, one Wall Street analyst says.
"In view of the rampant speculation on rumor sites, it would have been next to impossible for Apple to pull a rabbit out of the hat.* And it did not," Needham and Co. analyst Charles Wolf told clients on Wednesday. "There were no new iPods, only enhanced and cheaper versions of existing models."
What Apple did do, according to Wolf, was cement its leadership in the portable music player market and the online music market.*And the analyst credits much of that previous success to the company's robust and easy-to-use software applications.
"It’s the software, stupid," Wolf wrote in a research note. "It is an overused expression, but nonetheless software has been the secret sauce of Apple’s success in conquering the legal online music market where it has an 88 percent share in the U.S."
According to the analyst, Apple’s most significant announcement on Tuesday was an enhancement of iTunes software, which added numerous new features and even greater ease of use.
"The new features make the store even more user friendly than it was," he wrote. "In our opinion, iTunes represents the greatest barrier to competitors ever catching up with Apple’s multimedia ecosystem."
Still, the only product Wolf considered to be a 'new' product was Apple's still-in-development digital media hub, code-named iTV. Priced at $299, he believes iTV will represent arguably the easiest way for people to transfer content to their TVs.
"The significance of Apple’s Showtime announcements is that they should maintain, if not increase, the company’s dominance of the MP3 player market and the music download market," the analyst wrote. "They also insure that Apple will be one of the major players in the emerging video viewing market both on portable devices and in the living room."
Wolf continues to rate shares of Apple a 'Buy' with a price target of $90. He's estimating the company to earn $2.15 and $2.50 per share for fiscal 2006 and 2007, respectively.
"In view of the rampant speculation on rumor sites, it would have been next to impossible for Apple to pull a rabbit out of the hat.* And it did not," Needham and Co. analyst Charles Wolf told clients on Wednesday. "There were no new iPods, only enhanced and cheaper versions of existing models."
What Apple did do, according to Wolf, was cement its leadership in the portable music player market and the online music market.*And the analyst credits much of that previous success to the company's robust and easy-to-use software applications.
"It’s the software, stupid," Wolf wrote in a research note. "It is an overused expression, but nonetheless software has been the secret sauce of Apple’s success in conquering the legal online music market where it has an 88 percent share in the U.S."
According to the analyst, Apple’s most significant announcement on Tuesday was an enhancement of iTunes software, which added numerous new features and even greater ease of use.
"The new features make the store even more user friendly than it was," he wrote. "In our opinion, iTunes represents the greatest barrier to competitors ever catching up with Apple’s multimedia ecosystem."
Still, the only product Wolf considered to be a 'new' product was Apple's still-in-development digital media hub, code-named iTV. Priced at $299, he believes iTV will represent arguably the easiest way for people to transfer content to their TVs.
"The significance of Apple’s Showtime announcements is that they should maintain, if not increase, the company’s dominance of the MP3 player market and the music download market," the analyst wrote. "They also insure that Apple will be one of the major players in the emerging video viewing market both on portable devices and in the living room."
Wolf continues to rate shares of Apple a 'Buy' with a price target of $90. He's estimating the company to earn $2.15 and $2.50 per share for fiscal 2006 and 2007, respectively.
Comments
Despite of flurry of new iPods and other digital media announcements made by Apple Computer on Tuesday, its most significant introduction was a dramatically improved version of its iTunes software, one Wall Street analyst says.
"In view of the rampant speculation on rumor sites, it would have been next to impossible for Apple to pull a rabbit out of the hat.* And it did not," Needham and Co. analyst Charles Wolf told clients on Wednesday. "There were no new iPods, only enhanced and cheaper versions of existing models."
What Apple did do, according to Wolf, was cement its leadership in the portable music player market and the online music market.*And the analyst credits much of that previous success to the company's robust and easy-to-use software applications.
"It?s the software, stupid," Wolf wrote in a research note. "It is an overused expression, but nonetheless software has been the secret sauce of Apple?s success in conquering the legal online music market where it has an 88 percent share in the U.S."
According to him, Apple?s most significant announcement on Tuesday was an enhancement of iTunes software, which added numerous new features and even greater ease of use.
"The new features make the store even more user friendly than it was," he wrote. "In our opinion, iTunes represents the greatest barrier to competitors ever catching up with Apple?s multimedia ecosystem."
Still, the only product Wolf considered to be a 'new' was Apple's still-in-development digital media hub, code-named iTV. Priced at $299, he believes iTV will represent arguably the easiest way for people to transfer content to their TVs.
"The significance of Apple?s Showtime announcements is that they should maintain, if not increase, the company?s dominance of the MP3 player market and the music download market," the analyst wrote. "They also insure that Apple will be one of the major players in the emerging video viewing market both on portable devices and in the living room."
Wolf continues to rate shares of Apple a 'Buy' with a price target of $90. He's estimating the company to earn $2.15 and $2.50 per share for fiscal 2006 and 2007, respectively.
He has some solid logic in this analysis. I wonder if any of us know enough about iTV to form a worthwhile opinion about it. If it does what I think it does, I stand by my comments that it is an incomplete solution.
He has some solid logic in this analysis. I wonder if any of us know enough about iTV to form a worthwhile opinion about it. If it does what I think it does, I stand by my comments that it is an incomplete solution.
I think it all it really shows is the insane fragmentation of the video market. There is no way that Apple will be able to please some people regardless of the feature set of iTV.
edit: Of course some would complain regardless. If iTV came with everything you could think of, plus 2TB worth of internal Hard Drives. Somebody would be on these forums screaming: "if it doesn't come with 4TB internal they are not going to buy it, and it will be a flop".
Ian
iTV works for me, simple, slick and works right out of the box with my Mac and HDTV.
Ian
Yeah me too. Good price, cool product. Can't wait to get one.
One question/comment. I would love it if this device would utilize Wake On LAN so that it can wake up my iMac in my home office when I want to browse pics or music stored on it from iTV in the living room. Otherwise, I'd have to leave the iMac on 24x7.
I think it all it really shows is the insane fragmentation of the video market. There is no way that Apple will be able to please some people regardless of the feature set of iTV.
edit: Of course some would complain regardless. If iTV came with everything you could think of, plus 2TB worth of internal Hard Drives. Somebody would be on these forums screaming: "if it doesn't come with 4TB internal they are not going to buy it, and it will be a flop".
Amen to that. I keep hearing the phrase "complete solution" but usually it's along with a list of features that would double the price, and not everyone is interested in anyway.
Amen to that. I keep hearing the phrase "complete solution" but usually it's along with a list of features that would double the price, and not everyone is interested in anyway.
you mean like the PS3?
edit: I don't watch enough TV for it to be worth getting, but I think iTV is a great concept. I'll be interested to see how it fares compared to Microsoft's attempt to create the "digital hub" of the living room with Xbox.
Pity they don't pay dividends
Yeah me too. Good price, cool product. Can't wait to get one.
One question/comment. I would love it if this device would utilize Wake On LAN so that it can wake up my iMac in my home office when I want to browse pics or music stored on it from iTV in the living room. Otherwise, I'd have to leave the iMac on 24x7.
Can someone with multiple Macs test this out with Front Row accessing a sleeping Mac for content? Can it wake a sleeping Mac (assuming that Mac allows wake on LAN). If Front Row can do it now, I assume the iTV will do it when released.
If no one can test it, I'll have to run down to the Apple Store and try it.
Regarding the iTV, if Apple does it right (from the company's perspective), they'll be annual releases of the iTV, each doing more than the year before, in conjunction with iTunes Store upgrades. And as we pick up the next model, we'll be moving last year's model to the TV in our kids room.
Regarding questions: where is the processing for the Front Row GUI happening, including the processing to access the iTunes Store for trailers? It seems like it has to be inside the iTV, which means it has some level of general purpose processing, like the iPod. And that opens up a whole host of things, even simple games, like on the iPod. But then we'll need a remote that has a scroll wheel...
Can someone with multiple Macs test this out with Front Row accessing a sleeping Mac for content? Can it wake a sleeping Mac (assuming that Mac allows wake on LAN). If Front Row can do it now, I assume the iTV will do it when released.
If no one can test it, I'll have to run down to the Apple Store and try it.
MacBooks and MacBook Pros both wake on receiving a signal from the remote, even when the display is closed (as I've discovered when watching an iTunes TV show through s-video in my living room with my wife's MacBook also in the room). It's actually kind of annoying, since the dang thing powers up the optical disc drive every time.
Anyone know how to disable the optical drive?
I've got some friends who hate the iPod, and can't work out why it does so damn well, for something that isn't a huge amount better than anything else. They don't believe me when I say "iTunes".
Well, I'd say iTunes plus the wheel-interface. Computer people who love features never seem to realize how confusing most competing products are to consumers. Apples software, on the computer and the iPod, is definitely the secret of their success. To most companies, the interface is the last and least thing added.
Possibly this can act as the video output of the Mini, for when one is in the living room with the Tv monitor.
Then get a LaCie, or other unit, to sit below that with a 500GB drive, and you're all set.
Possibly this can act as the video output of the Mini, for when one is in the living room with the Tv monitor.
What would be the point? The mini already has video output.
Thinking about it I'm guessing that it could be that the iTV provides the hardware security required to have streamed HD on a computer. HD is streamed encrypted to the iTV box who can ensure that only HDCP secured output is allowed if the protection flags are set (which for the current HD-DVD and BR they are not AFAIK). I guess it would have to downrez the component out in that case to 960x540. Higher than DVD but still not as good as HD.
I hope the next generation of Minis and cinema displays are HDCP compliant out of the box but I guess a $300 dongle is a good enough intermediate step. Especially for owners of current gear that can't enforce hardware security.
Vinea
iTV works for me, simple, slick and works right out of the box with my Mac and HDTV.
Ian
With one caveat (for me anyway).... iTV must be able to integrate any/all DVDs that I've purchased and ripped to my HD and/or file-server (and has the ability to 'play' standard DVD menus and such - aka: VOB/??? support)
D
With one caveat (for me anyway).... iTV must be able to integrate any/all DVDs that I've purchased and ripped to my HD and/or file-server (and has the ability to 'play' standard DVD menus and such - aka: VOB/??? support)
D
Why? Don't you not have a DVD player?
This is my issue with what I've seen of the iTV so far: It doesn't do anything that my AV set-up doesn't already do. With Comcast, I have HD, a great program guide, content, a DVR, a decent remote and movies on demand.
Even if iTV has movies in HD, Apple would have to come out with a good enough TV subscription service for me to justify dumping cable. Even then, there's the whole issue of live sports (which, I suppose, streaming would solve).
What would be the point? The mini already has video output.
Are you aware of the discussions about this point? The output for the mini can't play DRM'd hi def material. Hi def will require that. Like it or not. Though Sony and Toshibia both say that they won't require it at first.
Not HDMI or component out. While DVI to HDMI is reasonably simple an interesting question is if the iTV will support HDCP...I would assume it would be a requirement but HDCP support on graphics cards has been nonexistent IIRC.
Thinking about it I'm guessing that it could be that the iTV provides the hardware security required to have streamed HD on a computer. HD is streamed encrypted to the iTV box who can ensure that only HDCP secured output is allowed if the protection flags are set (which for the current HD-DVD and BR they are not AFAIK). I guess it would have to downrez the component out in that case to 960x540. Higher than DVD but still not as good as HD.
I hope the next generation of Minis and cinema displays are HDCP compliant out of the box but I guess a $300 dongle is a good enough intermediate step. Especially for owners of current gear that can't enforce hardware security.
Vinea
Both ATI and Nvidia have announced support for it finally, after mumbling about it for months.