First year Apple TV sales fall below expectations
Introduced last year as the DVD player of the future, Apple Inc.'s $299 Apple TV set-top-box has thus far been anything but a hit with consumers, says one market research firm, which estimates that first year sales have fallen well short of initial expectations.
Cambridge, Mass.-based Forrester Research predicted back in May that Apple loyalists would help fuel sales of 1 million of the devices by the end the year. However, the firm is now pointing to a failed iTunes video revolution as doing its part to help stifle adoption amongst consumers.
?In addition to the 400,000 Apple TV units we estimate Apple has sold thus far, the company will be lucky to sell another 400,000 in the year-end holiday rush, short of our one million estimate,? said analyst James McQuivey. "Unfortunately, the same lack of interest in iTunes video will mean the iPhone and the iPod touch have less video momentum to ride.?
According to Forrester, nearly half of all adults with access to the Internet say they have heard of the Apple TV. However, only about 5 percent of those people familiar with the product say they've read up on it via Apple's website or took one for a spin at the company's retail stores.
In fact, Forrester claims that just 3 percent of online adults intend to purchase an Apple TV in the future -- essentially the same percentage of iLife users who eventually purchase one of Apple's standalone Jam Packs for GarageBand.
In a report last week, McQuivey warned executives of the Cupertino-based company that it was in their best interest to "win NBC back" as an iTunes partner if they had any hopes of replicating their success in music with digital video.
"Don't let the Macgeeks posting angry blogs against NBC fool you," McQuivey wrote in a report last Monday following the television network's pull-out from iTunes. "The loser here is Apple, which relies on NBC Universal to deliver 30 (percent) of video download sales. Any supposed backlash against NBC will not materialize because NBC has made its content available, for free, on NBC.com and six other major portals sites."
Cambridge, Mass.-based Forrester Research predicted back in May that Apple loyalists would help fuel sales of 1 million of the devices by the end the year. However, the firm is now pointing to a failed iTunes video revolution as doing its part to help stifle adoption amongst consumers.
?In addition to the 400,000 Apple TV units we estimate Apple has sold thus far, the company will be lucky to sell another 400,000 in the year-end holiday rush, short of our one million estimate,? said analyst James McQuivey. "Unfortunately, the same lack of interest in iTunes video will mean the iPhone and the iPod touch have less video momentum to ride.?
According to Forrester, nearly half of all adults with access to the Internet say they have heard of the Apple TV. However, only about 5 percent of those people familiar with the product say they've read up on it via Apple's website or took one for a spin at the company's retail stores.
In fact, Forrester claims that just 3 percent of online adults intend to purchase an Apple TV in the future -- essentially the same percentage of iLife users who eventually purchase one of Apple's standalone Jam Packs for GarageBand.
In a report last week, McQuivey warned executives of the Cupertino-based company that it was in their best interest to "win NBC back" as an iTunes partner if they had any hopes of replicating their success in music with digital video.
"Don't let the Macgeeks posting angry blogs against NBC fool you," McQuivey wrote in a report last Monday following the television network's pull-out from iTunes. "The loser here is Apple, which relies on NBC Universal to deliver 30 (percent) of video download sales. Any supposed backlash against NBC will not materialize because NBC has made its content available, for free, on NBC.com and six other major portals sites."
Comments
Unfortunately, the Apple TV is completing with Media Center, and for whatever reasons Apple TV doesn't have all the features people want. I can only imagine these limitations placed on them by external forces for them NOT to have some sort of DVR built into it. Adding that feature would have sold me on it for sure.
While I love the things it CAN do, I absolutely hate it for what it CAN'T. And with the Xbox 360 now offering DivX/XviD support then not only does the Xbox give us total codec support, it also plays games.
I have no interest in being a "gamer" but I'm very tempted to selli the AppleTV and buy an Xbox purely for streaming video. Heck, it beats being a guinea pig for what Apple deems to be a dead "hobby".
(Yes, I've tried unlocking it but for weeks I've gotten nowhere. Maybe Apple should just quit being so tight with these ignored products and just unlock the darn thing so it can do what it's capable of doing.)
I have a decent stereo system and it's an easy way to play music .
Visitors love looking at full screen photos. Every visitor thinks it's incredible.
Would I buy it again? Yes!
What's missing:
...HDTV
With Amazon Unbox and the new offerings TiVo keeps rolling out (Music Choice, DesktopToGo, etc.), the Apple TV fades further and further away in the rearview mirror of choices.
They also have to learn to play nice with their content suppliers, like it or not.
My wife buys the occasional show. But, in some cases, she now watches the commercially sponsored versions, as they are not on iTunes. Whether we are happy about it or not, people are used to watching commercials. If they can learn to do that with internet offerings, then the pay sites, like iTunes, will have a hard time of it.
I think we can all suspect that the other Tv companies are closely watching what is happening with NBC, and Universal. If they look to be making a success of it, Apple might see more follow their example. And, actually, some of the companies who do sell content on iTunes are already following their example.
Apple better get its ass in gear. What they have to understand, is that internet sales are still a very small portion of the content company's total income. While that remains true, they can experiment, and leave, with little loss to themselves. If Apple sees its way to understanding their needs, sales may rise to the point where they can't as easily leave.
As these companies are either charging no more than Apple is, or offering content for free, ad supported or not, we can see that price is not really the entire issue?control is. no business wants to have its pricing controlled by its retailers. It just doesn't happen.
iTunes video is low-quality & too expensive. Plus watching video is more of a commitment than listening to music. It requires your attention, unlike music. Not to mention that a TV show lasts 22 minutes or more, whereas a song lasts roughly 4 minutes. For this reason, it's unrealistic for people to want to own video, as there's less time to watch it. Renting is the obvious answer to this problem. Cheaper and less committal.
Then there's aTV. TOO DAMN EXPENSIVE! For that price it should have a DVD player, and/or DVR. I know those technologies compete with the iTS, but it would still mean extra $$ in Apple's pocket. With the iTS video aisle the way it is, I'd say screw it and include these technologies. If Apple had a DVR that could capture and export to iTunes quickly and easily, so that you could upload to your iPhone or iPod........ now THAT would be a technology worth purchasing.
aTV and the iTS video section are both failures in my eyes.
I would've liked to have had an aTV too... except I'm resorting to a Mini so I can have DVR.
-Clive
The state of the AppleTV is 100% due to Apple failing to give a crap about it.
I couldn't agree more. I've had my Apple TV since it was released, and I've seen hardly an effort put into this device. The last activity we've had from Apple is when they added YouTube on June 20. Big f-deal. Trying to use YouTube with the Apple remote is like trying to chew without teeth.
I've rarely watched a movie all the way through without having to get up and reset something. My Mac will lose the connection, or the Apple TV will lose the connection, or error messages such as the media is not readable when it is.
It's one of Apple's pet projects they use to test the waters with, like .Mac. Fortunately I only spent $200.
Since Apple has basically created a dumpster baby with the Mac Mini and Apple TV. I'm confident they will release a product that combines both, since it would be stupid to give up on streaming media.
And frankly, I don't mind going to NBC and ABC's web site to watch a show I missed. TV networks posting their shows for free on their web sites is just common sense.
Let's see, they pulled an arbitrary number out of their ass and now they jump all over Apple because they didn't meet this number?
How freaking simplistic can you be?
Edit: Why don't we revisit Forrester and their past fiascos? Anyone remember the doom and gloom that Itunes was dead? This group has less than Zero credibility!
Hmm let's see what went wrong here...
iTunes video is low-quality & too expensive. Plus watching video is more of a commitment than listening to music. It requires your attention, unlike music. Not to mention that a TV show lasts 22 minutes or more, whereas a song lasts roughly 4 minutes. For this reason, it's unrealistic for people to want to own video, as there's less time to watch it. Renting is the obvious answer to this problem. Cheaper and less committal.
Then there's aTV. TOO DAMN EXPENSIVE! For that price it should have a DVD player, and/or DVR. I know those technologies compete with the iTS, but it would still mean extra $$ in Apple's pocket. With the iTS video aisle the way it is, I'd say screw it and include these technologies. If Apple had a DVR that could capture and export to iTunes quickly and easily, so that you could upload to your iPhone or iPod........ now THAT would be a technology worth purchasing.
aTV and the iTS video section are both failures in my eyes.
I would've liked to have had an aTV too... except I'm resorting to a Mini so I can have DVR.
-Clive
Yeah, I'm surprised that Apple hasn't already upgraded this thing. Maybe we'll see something at Macworld.
Apple is too stuck on what it wants everyone to do, rather than seeing what everyone wants to do. Trying to force everyone to iTunes is not working for video. If they can't see that, they are in trouble.
Why does AI keep posting this Apple Bashing tripe from a known Apple Bashing hate group?
Let's see, they pulled an arbitrary number out of their ass and now they jump all over Apple because they didn't meet this number?
How freaking simplistic can you be?
It isn't Apple bashing, it's reality. Most of us here can see that.
In addition to the 400,000 Apple TV units we estimate Apple has sold thus far, the company will be lucky to sell another 400,000 in the year-end holiday rush
...
Forrester claims that just 3 percent of online adults intend to purchase an Apple TV in the future
That sound pretty good to me. How many TiVos have been sold in that time frame? It seems obvious that Apple released the AppleTV prior to the movies appearing on iTunes Store to give an example of what AppleJust wait until the movie content is there, especially if rentals are permitted.
Too many limitations,
Unfortunately, the Apple TV is completing with Media Center, and for whatever reasons Apple TV doesn't have all the features people want. I can only imagine these limitations placed on them by external forces for them NOT to have some sort of DVR built into it. Adding that feature would have sold me on it for sure.
Windows Media Center? That is much pricer option and using the 360 is only a solution for gamers who are somewhat technically savvy.
As for a DVR, I only foresee that happening if and when the other major television studios back out of iTunes. For Apple to add a DVR would kill a good deal of the iTunes store videos thereby stunting iTunes Store downloads even more when Apple is already struggling to get movie studios on board and pissing off the television studios, including Disney.
PS: WHo is going to incorrectly state that the AppleTV can only output in low-def?
However, the firm is now pointing to a failed iTunes video revolution as doing its part to help stifle adoption amongst consumers.
How is iTunes' bad quality video a revolution?
Forrester Research says that Apple TV sales fall below Forrester Research predictions.
Apple TV was never meant to be a huge tidal wave--it's a strategic piece that Apple needed to offer BEFORE demand for such functionality was significant. (A strategic piece that has nothing to do with DVR. A product isn't a failure just because only a small number of people want it, nor because YOU don't want it. That's like saying there shouldn't be an iPod Classic because more people want a Nano. Apple TV is simply an option the iTunes ecosystem needs to have for completeness. You could just as easily say that iPod-to-TV adapters are a failure because more than 50% of people don't need them. Well, they're a great option if you need them, and no harm done if you don't.)
Yes, the move into downloadable video has been slow--for all companies. That's not a "failure." The movie and TV industries will drag their feet at all costs. There's no one partner--not even NBC--that Apple needs to stay afloat. There's room for multiple solutions, and just because iTunes isn't the only one (merely the largest) doesn't make iTunes video a flop.
Apple TV is not the last step, but the first. Forrester Research's "predictions" that focus on a tiny piece of a bigger picture don't mean much.
BTW, some commentary here on the supposed Apple TV "failure:"
http://www.roughlydrafted.com/2007/0...e-facts-wrong/
It isn't Apple bashing, it's reality. Most of us here can see that.
Well, I've seen, what, about 6 of you posting about how bad it is, and none of you own one.
I do own an AppleTV, the small 40GB one. I don't store anything on it, as I stream everything from a Mac Mini to it.
I've ripped about 200 movies from DVD's using 720x4xx settings and it's absolutely amazing on my 46" LCD TV. (Not to mention about 7 HD Podcasts, all my other video and audio podcasts) It's so good in fact that 3 others in my family have purchased one, as well as 6 or 7 friends of mine.
It's the non-owning, paper spec queens, that keep saying it's a failure.
As has been pointed out repeatedly on forums such as these right from the get-go, it is the product itself that is wanting. (For instance, if it could wirelessly receive video signals from the computer -- which, of course, would require it to be made independent of iTunes -- then someone could watch NBC from hulu-or-whatever.com).
It sounds a lot to me a like a market research firm CYA-ing because of its own flawed predictions.
MacWorld 08! *crosses fingers*
The state of the AppleTV is 100% due to Apple failing to give a crap about it.
Apple TV is is an incomplete idea. It needs dvr functionality, cable card slot/s, and 1080P to make it a product that consumers will truly understand.
These two posts have it right. It's not shocking that the
Also, it's lacking some major features that really hurt it.
- HD Content. Those crummy little 640 videos from iTunes don't look great on a 42" Plasma. You clearly intend for the
TV to be used with an HD set, so give me HD content.
- Direct iTunes integration without a PC or Mac. Why do I need to keep a computer running when I want to load the
TV? If my iPhone can purchase content from the iTunes store directly, the 
TV should be able to also.
- Full Dolby Support. No excuse.
- DVD Drive w/ BTO Blu-Ray Option. No one wants to add one more device to their Home Theater setup. It just means more space, more power, more heat, and another damned remote. Make this the one device. If I can get rid of the DVD player and just use the
TV, that makes my life easier, and it makes the product more compelling. Hell, a DVD drive must be about $8 in parts. Slap it in there. If you want Blu-Ray, pay $200 more. At least give us options.
- More content and Movie Rentals. This is the tough one. The iTunes store is struggling to find enough Movie content. That doesn't help the
TV. It would be great if you could just order a movie right through the device, have it download and start playing within 5 minutes, or have it download and sit ready for you when you actually have time to view it.
I think this device has a place, and could be a big seller, it just needs more focus.