Photo via Digital Trends
It’s to the point now where I don’t bother to read anything with “Apple” and “rumor” in the headline. As we’ve seen from the past 5 or so new product releases, about 80% of pre-announcement rumors are garbage. For my money, the component suppliers in Asia seem to know more than most, but they’re still just guessing.
With that said, I’ll throw my unqualified, semi-educated guess on the impending Apple television into the ether. Take this and run with it or line your bird’s cage with it.
I’ve seen reports of 32″ to 37″ but anyone with knowledge of the TV market or who has bought a FPD knows this is way low. Approximately a third or so of TVs sold today are at least 42″, so a TV in the 32″-37″ range would miss the sweet spot of this market. Can you imagine the the suburban mancave being built around a 32″ TV? Neither can I. I think two screen sizes, one at 42″ the other 50″ is much more plausible. Nobody ever says “my TV is too big”…
So Wi-Fi connectivity is a given. I’ll bet Apple includes an HDMI input and possibly one for coax, but that is kind of counter to the proposed concept of the product (as I see it). Apple wants this supposed device to be as wireless as possible, connecting to the Internet via Wi-Fi and to set-top boxes like Blu-ray players and game consoles through Airplay. Airplay is still in its infancy adoption-wise, but it is my belief that it will pollinate more devices to tap in to this ecosystem. Imagine a fully functional, connected TV whose only cord is for electricity. You could put it anywhere. Still, funneling viewers to iTunes for content is the big big goal, so perhaps limiting Airplay or HDMI inputs could a be a way to do this.
This is the biggest hurdle for Apple and likely the one they are most concentrating on in their meetings with the media companies. As we saw with last year’s itteration of Google TV, the networks don’t like it when you put their content on a new screen before they’ve had a chance to monetize it. I think Apple is looking to offer some version of a la carte programming either through season passes for specific networks or shows (like they do now). This could work OK for traditional networks like NBC, Fox; REALLY well for guys like AMC and FX; not so well for the HBOs and Showtimes of the world. Apple has been good at bringing non-modular content purchasing to consumers and I would expect this is where they are going with this effort.
Lost in all of this are the service providers. With Apple looking to provide DTC content, should the cable companies be worried? Yes, but not right now. I think an Apple television and its associated platform and ecosystem will be successful, but not enough to put a big dent into their revenues. I think many will buy an Apple television, but at first just a few will decide to cut the cord because of it. Imagine this offer- cut your TV programming bill in half by giving up a third of the channels you currently get (and don’t watch). I’m all over this, but I bet many consumers would be hesitant.
It will be expensive- I expect a premium of 75-100% on the current price of TVs in the size range. The TV business (at least lately) is a tough one with ASPs falling quickly and commoditization of some screen sizes. Apple obviously has a lot to offer a premium TV shopper, so it makes sense, but as we continue through the refresh/replenish/secondary display cycle, profits are hard to find. So, this will have to provide a value beyond the screen to work. Apple’s strong brand will only take it so far- the platform has to legit. There’s no real reason to think it won’t be, but we’ll wait and see.
Odds and Ends
Interface. I think Siri is a no-brainer. I would like to see some type of Kinect like functionality as well– it seems like that would be easy enough to incorporate and would add some shine to the product. Philips has an interesting product called uWand, designed specifically for the connected TV. I can see Apple using something similar, possibly with Siri embedded.
Gaming. I think this product will give rise to a new genre of iOS games that are played on the big screen and controlled with iOS devices (or voice or motion). It’s kind of interesting to think what developers might do with all this. That is if it ever materializes…
Selling the walled garden. As we’ve seen with other connected TV models, content bought on one particular platform rarely travels to others. This is a big problem for manufacturers. One the one hand, they’ve seen Apple own an ecosystem from top to bottom with great results, on the other there is risk in not allowing other devices (and brands) interact. Apple’s television could be another example that this can work but at what point does a TV manufacturer open up their platform and allow other brands in? This could be where the opportunity lies.