AppleTV still not an iFlop

Posted:
in Future Apple Hardware edited January 2014
I was going to post this as a reply to Ireland's most recent thread about the AppleTV, but then I decided that I'd worked too hard on it to let it languish on the second page of a thread which had become fraught with... I don't know - the stuff threads become fraught with.



I cannot imagine why Apple would ever produce their own television. Televisions come in a multiplicity of styles and sizes for a reason. Sure Apple could make a couple premium varieties and they would sell well to the faithful (I might buy one myself), but they could never grab a substantial share of the market. The AppleTV set top box is about revolutionizing the television experience. It cannot succeed by appealing to an elite audience; like the iPod it has to create a groundswell among the masses. Thus I would say that the claim that Apple will produce televisions is absurd. On the other hand, I also feel that those who are proclaiming that the AppleTV is a flop are equally misguided. The "revolution" has only just begun.



I posted on this issue about 9 months ago (Link). I'll summarize here my main points, with a few additional ideas.



Internet/television convergence has been prophesied for so long that many people take it for granted that it won't ever happen. The internet experience is active, television is passive; nobody wants to read email on a television screen, and the idea of typing on the TV is just plain lame. These objections and many others are correct, but that does not mean that the internet cannot revolutionize our television viewing possibilities and habits.



The key to convergence is a "super remote" that operates all the functions of the television, while simultaneously providing full internet access in the palm of your hand. That super remote is the iPhone/iPod Touch (for simplicity referred to hereafter as the Touch). Here are some of the potential features:



The Obvious:



1. When Apple finally works out agreements with all the TV networks and the movie studios, you'll be able to use the Touch to search through a library as comprehensive as the iTunes store is for music. You'll be able to rent or buy any program for immediate viewing. (One of the key points that drives my belief about this is that making selections in the palm of your hand by Touch, is FAR SUPERIOR to doing it on the television screen with point and click.)



2. Eventually, YouTube videos will mature so that they look good on television. The ability to program sequences of YouTube videos in your hand will be game changing. YouTube will also have "channels" so that you can veg out on odd dancing videos or stupid skateboard accidents or whatever you prefer.



3. It brings internet pornography to the big screen. I read somewhere that pornography is the main engine driving the adoption of consumer technology. I'm somewhat suspicious of the claim, but I'm honest enough to admit that I can see the potential. Apple will never advertise this capability, but it doesn't need to. When you can Touch videos from the internet to display on your 80 inch LCD... need I say more?



The Commercial:



4. I suspect that most of the people who'll read this aren't into home shopping. But the audience that is, is disturbingly large. Can you appreciate what a boon it could be to such folks (and the companies that take advantage of them) to allow people to shop interactively on the television? See the product on the TV, click a link on the Touch, and it's yours. No interest in the current item? That's OK, skip ahead to the next.



5. As much as home shopping networks disturb me, I can see a future in which a television version of Amazon has appeal. There's lots of stuff I can't buy on the internet until I've seen it in person. Well-produced video might make a difference. But in most cases, I don't want to sit at my computer watching quicktime movies - that feels too much like work. (This is where the difference between computer and television actually lends itself to the right form of convergence.) Let me kick back on the sofa, and search products in the palm of my hand while those I'm most interested in are demonstrated on the TV. I can see myself avoiding Best Buy if the videos are good enough. (Note: Such technology may well be irrelevant for buying books and DVD's, but can't you see people buying technology and clothing and tools and even vehicles this way? (Do we appreciate how much consumerism drives technology?)



6. Advertising. What if broadcast and cable/satellite could imbed links in programs? An Apple advertisement appears on the TV, and at the same time a link shows up on your Touch to visit Apple's website. Of course, the same thing happens for every other advertiser on the Tube. This is the type of interactivity that advertisers will pay for. Or how about this horror story: Do you like the shoes on your favorite reality TV character? Check the links in the palm of your hand. You can buy them! Talk about product placement - this is the future advertisers yearn for.



The Cool:



7. Want to listen to the news? Get an overview from your favorite anchor and then choose the stories you want to hear about in depth. Such possibilites have been speculated about for years, but the Touch is the device that finally makes this easy and brilliant. (If you don't see why the Touch is important here, I don't know how to convince you. Touching a few topics while the anchor speaks is so much more intuitive and satisfying than pointing to a list of topics that appears on the TV screen itself. Everything I'm mentioning in this post is special because of the way it's controlled by the Touch.)



8. With the App Store at it's disposal, it would be the epitome of lost opportunity if the AppleTV did not transform into a gaming platform. As Nintendo has shown, you don't have to compete with the graphics of the PS3 (or that other thing) to become the king of casual cool. Let the Touch act as an infinitely versatile controller, and the app store as a provider of cheap games. - I declare victory.



9. Let the app store run wild. If God exists, then He is the only entity that knows what is possible. Customized weather and stock reports for sure, but more importantly, phantasms no human has yet conceived.



10. I'm pretty sure that the next version of the AppleTV will make flavored toast.



To summarize, I assert that the iPhone/iPod Touch will lend capacity to the AppleTV that will make it the gateway to the grail of convergence.



***************



Yeah, OK, I don't know if Apple will accomplish anything I've mentioned here. I merely enjoy speculating.



The "transitional product" everyone wonders about is the iPod Touch itself. The iPhone is selling for $199, so Apple can't leave the Touch at $299! Even if everything I've said here is garbage, the Touch is a serious competitor for the DS and the PSP (as long as it's available at the right price). Wallstreet is convinced that the iPod is withering, but those morons couldn't be more wrong. There are umpteen millions who can't afford a smartphone contract, but would be pleased as suburban punch to have internet, games and music in a single infinitely cool device. And I'm not talking merely about children, but college students who have no money but do possess ubiquitous wifi on campus.



A Touch at $199!? Damn the margins, we're changing the world.



PS - Ireland, no disrespect intended. I don't agree with you, but you inspired this response.

Comments

  • Reply 1 of 12
    I totally second that. Apple going into the TV business will just get eaten, leaving the core behind.
  • Reply 2 of 12
    MarvinMarvin Posts: 14,219moderator
    So basically, I have to have a TV, which I paid as much money for, I then have to get an Apple TV for $229 knowing full well that it is a failed product. I then have to get an ipod touch for $299 to act as the remote, which will only last maybe 24 hours before needing a recharge.



    It also requires wireless internet to be available. Also how does the iphone/ipod control an infra-red device? Perhaps over wifi it can do this.



    I agree it would be a cool setup to have and has a lot of abilities. However, the cost is just way too much when you see what Apple TV offers. I'd rather just spend $599 on a Mac Mini with a wireless keyboard and mouse and that way I get all this functionality and more.
  • Reply 3 of 12
    robmrobm Posts: 1,068member
    Quote:
    Originally Posted by Marvin View Post


    I agree it would be a cool setup to have and has a lot of abilities. However, the cost is just way too much when you see what Apple TV offers. I'd rather just spend $599 on a Mac Mini with a wireless keyboard and mouse and that way I get all this functionality and more.



    I have been sooo tempted to get either or both but neither of them satisfies MY ideal of having 1 remote to control multiple sources = yet another fcuking remote for the kids to lose ... seriously.



    It's all about convergence from multiple sources into one delivery mechanism. If anyone can crack this Apple can ... just not there yet.
  • Reply 4 of 12
    areseearesee Posts: 776member
    Macjello, good post and I totally agree with you. Ireland is wrong with his concept of the AppleTV for just the reasons you mentioned. To compete Apple will have to produce way to many styles and models in order to make it work. (After an earlier thread I went into Fry's and counted no less than 10 models in each class from any vendor. If Apple was to enter the TV market they would need 20 TV models. Not going to happen.)



    Marvin, we will have to choose to disagree here. But I got the mini for just this purpose, after failing it is now a file server. IMO the AppleTV is a much better solution.
  • Reply 5 of 12
    Quote:
    Originally Posted by macjello View Post




    6. Advertising. What if broadcast and cable/satellite could imbed links in programs? An apple advertisement appears on the tv, and at the same time a link shows up on your touch to visit apple's website. Of course, the same thing happens for every other advertiser on the tube. This is the type of interactivity that advertisers will pay for. Or how about this horror story: Do you like the shoes on your favorite reality tv character? Check the links in the palm of your hand. You can buy them! Talk about product placement - this is the future advertisers yearn for.




    bingo!!!!!!
  • Reply 6 of 12
    gugygugy Posts: 794member
    It doesn't surprise me that many people think Ireland is wrong. I am one among them



    Now seriously, I like your point macjello.



    I do believe AppleTV is the product Apple has to focus in order to get into the living room and not a display with Apple brand. The market is saturate with great displays and the competition is intense with low profit margins.



    I much rather have Apple focusing on the experience of watching TV and getting the content you want. That's where they can be successful. Hopefully in few years we will see AppleTV having a similar success like the iPod. Time will tell.



    Also, a lot of networks would like to have their channel embedded inside the iTunes interface, so they can provide their shows for a fee. So the potential is huge. It would be interesting to see if Apple would open their model to other to join and expand the capabilities and the content available.



    I hope these are the baby steps for something big in few years. At least Apple and Steve are the ones that have the clout to bring the industry to follow their lead. It has been very hard begining, but if there is a company that can change that, that company is Apple.
  • Reply 7 of 12
    The ABC in Australia has launched a service called iView. It allows you to watch the television shows that have aired in the past week. The only thing is it is sort of difficult to watch it on a television. What if the AppleTV had a service like this for all television networks. Select a network then choose a show you missed and watch it free for that week.



    ABC isn't a commercial broadcaster but the commercial networks could benefit by including a commercial or two. Some television shows (Good News Week) allow you to download podcast and include a few commercials which I don't mind.



    It certainly adds value.
  • Reply 8 of 12
    programmerprogrammer Posts: 3,409member
    Quote:
    Originally Posted by Marvin View Post


    I then have to get an Apple TV for $229 knowing full well that it is a failed product.



    While I agree with your basic tenant that the setup described in this thread is too expensive, I don't agree that the Apple TV is a failed product. Jobs said at its introduction that it was a way for Apple to get their toe in the door and explore this idea of getting into the living room and connected to the TV (and I don't think Apple will make their own TVs either.. although the difference between a computer display and a TV has gotten awfully thin). And it is also important to note that Apple TV is a computer... the thing is a Mac underneath the software skin it ships with. That means that unlike most consumer electronics devices, it can be transformed. Apple has already revved it once, and they can do it again... as suggested above they could even open it up and do an AppStore for it. I don't think they'd try to push it as a game machine (nor should they), but allowing game developers into an AppStore like they have for the iPhone increases the appeal to the typical non-gamer consumer who just likes having options. The potential for integration between AppleTVs, Macs, iPods and iPhones is interesting... the digital home takes a step closer. Allowing the handhelds (or Macs) to operate as controllers for the AppleTV is cool as long as its not required.
  • Reply 9 of 12
    guinnessguinness Posts: 473member
    I don't want to buy a Touch and ATV, just to have a better experience from that oversized iPod for TV. By the time you get a Touch and ATV, you're looking at $500. And then there is the fact that iTunes is very limited, as it can't play a lot of content, only want Apple allows (no Divx/WMV?AVI, etc). And YT videos look like crap.



    Much rather have a PS3 - media streaming, wifi, and Blu Ray, or even a Mini, as that at least has a DVD player.
  • Reply 10 of 12
    There were three key ideas behind my initial post:



    1. There is definitely a future for television/internet convergence.

    2. Hardware from Microsoft, Sony, Amazon, Netflix and others will all be competing with the ATV to enable elements of that convergence.

    3. Apple's advantage will be enabling the Touch as a WIFI remote, bridging the interface gap between the internet and the TV.



    Thinking about this over the last few days, I've realized that I've been conflating two distinctly different roles for my fantasy version of the ATV/Touch combination. On the one hand I've been thinking of it as a device to bring current and future internet content into the living room. But on the other hand, I've been thinking of it as a means of controlling and enriching current television streams from broadcast, cable and satellite. These two roles aren't mutually exclusive, but having given some thought to the differences, I'm struck by how significant they are. Perhaps this is obvious to others, but I haven't read anything that talks about this point very explicitly. Anyway, consider the following:



    1. As it stands the Apple TV brings some limited forms of internet access to the television. It can grow along these lines with very little hardware modification. It can accomplish most of the functions I mentioned in my initial post merely by allowing the Touch to send selected (mainly video) links to the TV screen. As internet video becomes ubiquitous, and television networks take up residence on the web, the ATV/Touch combo gains value. An ATV developers kit and a gaming based app store are also internet based improvements.



    2. In contrast, in order to turn the Apple TV into a mechanism for controlling current TV streams, significant hardware changes would be necessary. The sort of features many have envisioned (myself included) would require cable/antenna inputs, and all of the relevant decoding chips. The reasons to add such hardware would be two fold: First, the current television interface could be improved. Having a comprehensive programming guide on a Touch Remote would be wonderfully useful and elegant. Moreover, a fully realized Touch Remote could allow you to flip channels in your hand before changing programs on the TV screen, like a handheld version of "picture in picture." (This is functionality our spouses would appreciate.) My fantasy version of the device would even provide real time previews of a dozen simultaneous programs, postage stamp-sized to be sure, but useful nonetheless. But the second, more important advantage is that once television streams are passing through the ATV, they could contain embedded links to the internet which would be available on the Touch. The possibilities for embedded links are truly astounding.



    In the past I have considered both of these stories as part of the future of the ATV. I realized that they were different, but I had been ignoring the enormity of that difference. They require fundamentally different technology, and more importantly, they represent fundamentally different strategies for (and visions of) the future. Now that I've reflected on this a bit, I don't think Apple is going to make any effort to control broadcast, cable or satellite television. The ATV is solely an avenue for bringing internet content to the television. And the truth is, the more I think about it, the more obvious this is, and the more sense it makes. Broadcast and cable are (slowly) dying technologies. Eventually, the internet will absorb all their content.



    This may take a decade or more, but here's how it might play out: Apple and others are going to continue to focus on their online movie rental strategies. Netflix will do well because of their enormous catalog and their low cost box. MS and Sony will do OK because some people will buy their boxes for gaming and/or Blu-ray. But Apple will be recognized as the leader because of the utility and elegance of the ATV/Touch integration. At first this integration may be limited to controlling existing ATV functions (rental and purchase from the iTunes store and YouTube). But soon enough, a version of Safari will allow you to tap any quicktime playable content and send it to the TV screen. Initially this will mainly be useful for porn and a handful of video sites, but a few pioneers will understand the possibilities and offer full-fledged online TV channels. Maybe it will be the existing networks, or maybe it will be some new upstarts, but the interactive potential and the appeal to advertisers will bring a proliferation of online "channels." Apple won't be the gatekeeper, they'll just be the company that created the environment to enable convergence.



    Competition for the ATV/Touch combo will be fierce. Windows mobile will build in similar functionality, as will Android. Maybe even the PSP and the Zune will enter the game. To be honest, some of these may do OK, but Apple will have the headstart, and they will provide the premium solution. Eventually, the advantages of internet TV to both viewers and advertisers will bring all networks aboard. The pay-off for Apple will be sales of the ATV and the Touch, and the fact that the iTunes store will become the premier venue for the purchase and rental of video content. (I envision that online TV channels will make content available on demand, but the iTunes store will fill in any imaginable gaps.)



    If any of this is correct, then hopes that the ATV will soon replace all your other set top boxes and/or remotes is misplaced. Hope for a built-in DVD player is also misplaced. And worst of all, there will be no Apple DVR. But then, if what I'm suggesting is correct, all of these technologies are dead ends. As bandwidth increases and storage prices fall, there won't be any need for plastic discs or personal recording, because virtually all content will be available to buy, rent, or view on demand in ad-sponsored format. In the end, the ATV/Touch WILL completely control your TV, because everything except the internet will have withered and died.



    ******



    A number of the replies to my initial post point out that the AppleTV/Touch combo is too expensive for what it does. If you're thinking about buying an ATV and a Touch at current prices merely to enable movie rentals, that means $529 minimum for access to a rather disappointing catalog. Not a good deal, I agree. But there will be changes. Apple's catalog will grow, prices will drop, and the value of the other options will become apparent.



    But I also suspect that Apple will succeed with the ATV in part by getting the Touch/iPhone into millions of hands. Once people already own the remote, buying the ATV doesn't seem like such an investment. I strongly believe that the iPod Touch presents an opportunity for Apple that's bigger than any previous iPod. As a mobile gaming platform, as an internet device, and as a general purpose pocket computer, the Touch has unlimited potential. It just has to be priced right to take advantage of that potential. The DS and the PSP sell for as little as $130. Their revenue models are based on cheap hardware and expensive games, so I don't expect Apple to match their prices. Still there needs to be a Touch for $199 or less. I hope this is the much bally-hooed product transition/margin hit we hear so much about.



    As much as I'd like to see a cheap Touch, I'd also like to see a physically larger Touch. A larger iPhone probably doesn't make sense, because phones need to be small. But for both games and internet, a larger screen would be excellent. I think many people would trade pocket portability for a larger viewing area - say half an inch wider and three quarters of an inch longer. At any rate, I think the market could support both a cheap touch at the current size, and a larger Touch at a higher price.



    Moreover, it's almost certain that Apple will eventually produce a Mac Tablet. Whatever software runs on the Touch might as well operate on the tablet. As a matter of fact, it might as well run on Macbooks as well. If you prefer to control your TV from your laptop, go ahead. (Before you dismiss this as silly, there are purposes for which this could be awesome.)



    In short, once the Touch and other devices can function as a remote, they become selling points for the ATV. To be sure, at least for the forseeable future, the ATV should continue to come with a cheap remote that provides onscreen control for as many features as practicable. You shouldn't have to buy a Touch to take advantage of movie rentals. Still, when you're trying to decide between all the available set top boxes, knowing that the option for so many alternative inputs is available will factor into your decision.



    Finally, I hope that Apple will drop the price on the ATV. I think the intro level model should sell for $99. They might actually lose money at that price which is not the way Apple normally works, but there's good reason to think differently about this opportunity. I've read that on average, iTunes sells only 20 songs for each iPod sold, and Apple always tells us that they don't run the iTunes store for a profit. But movies and music are different. There's no good reason that Apple can't make good profit renting movies. Of course, they can only do this if they get ATV's into customer's hands.



    I wish I didn't enjoy speculating about this stuff.
  • Reply 11 of 12
    benroethigbenroethig Posts: 2,782member
    AppleTV still has three major hindrances to it being a major success.



    1. No native first party DVR function on it or Macs. No, people do no want to but a clip show of the game or race a week later. Being able to watch what you wish to tape on your laptop, desktop, TV, or even your iPod/Iphone would be a major selling point.



    2. There is no (technically legal) way to import your DVD collection. Apple should be working with the movie studios on a way to be able to do this using fairplay DRM. Yes, I do know about handbrake, but I'm talking about something official.



    3. Video compression technology isn't near as good as the audio side. The files need to get smaller and be of better quality, especially with HD.
  • Reply 12 of 12
    @homenow@homenow Posts: 998member
    Quote:
    Originally Posted by BenRoethig View Post


    AppleTV still has three major hindrances to it being a major success.



    1. No native first party DVR function on it or Macs. No, people do no want to but a clip show of the game or race a week later. Being able to watch what you wish to tape on your laptop, desktop, TV, or even your iPod/Iphone would be a major selling point.



    2. There is no (technically legal) way to import your DVD collection. Apple should be working with the movie studios on a way to be able to do this using fairplay DRM. Yes, I do know about handbrake, but I'm talking about something official.



    3. Video compression technology isn't near as good as the audio side. The files need to get smaller and be of better quality, especially with HD.

    1. ATV could be viewed as the playback device, IF the DVR capability comes it should reside at the central storage/cataloging location, ie. the computer so that it can be cataloged as it is recorded.

    2. Movie studios are starting to include MP4 versions of thier movies on DVD's and will eventually embrace full digital delivery.

    3. h.264 is used for Blue Ray I belive, and is fully capable of scaling to the needs of most users and delivery methods today. It may get better, but so will the internet deliver speeds. Together they will make the deliver more than acceptable for most users.

    The bigger question is how are the internet/cable methods going to shape up and compete over the next few years. If you have an internet catalog of the weeks (or even seasons) commercial programing available that the AppleTV can hook into then there is not as much need for the DVR, you just dial up the program and watch it ... complete with commercials for the advertisers to make revenue on they programs they are paying for. Don't want the commercials then buy the episode, movie, or season of the show in question. If this happens then there is the real chance for the TV to become just a monitor. The cable companies will fight it as long as they can and the networks may not want to play along and these are the two biggest hurdles right now.



    Better yet, take the PodCast model of program delivery where you subscribe to the show. It is automatically downloaded and cataloged for viewing later. The networks would probably want some kind of time limit on it which is currently built into the rental model, or some other way for the networks to count the "views" of the commercial supported shows so that they can charge their advertisers accordingly. Again, want to own the show and don't want the commercials they buy the show to help make up for the loss in ad revenue that the networks need to stay in business and produce new programing.
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