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February 22, 2007

speculation

Apple TV to grab 30% of DVD market

Posted Feb. 22, ’07, 6:34 AM PT by Derik DeLong
Category | Apple » Speculation

Apple TV Chris Whitemore of Deutsche Bank must be really anticipating his Apple TV. He’s starting to hallucinate a bit.

“It’s conceivable” that Apple’s living room entertainment box—rival to Microsoft’s Xbox—could carve out 20 to 30 percent of a $26 billion market in a few years, Mr. Whitmore said Tuesday in a report.

The Apple TV is now a rival to the Xbox? Ok, the Xbox has some media capabilities, but let’s be realistic. That’s where the similarity ends. The Xbox can play next generation games, has an HD-DVD attachment, and can even rent HD movies over the internet completely autonomously. I hate to say it Apple fans, but I think the Xbox actually beats the Apple TV at its own game. Where’s the High-Def content Apple?

Apple stands to first gain from the roughly 40 million people who use iTunes, but Apple TV will eventually eat into the business of makers of DVD and CD players, according to Deutsche Bank.

I still don’t see Apple TV destroying DVD sales. The quality isn’t as good and nearly as convenient for most consumers. I’m still waiting to see what Apple TV will become and what market will be its strength, but right now, I see it as a niche market, catering to iTunes Store users. Time will tell if it gets more.


4 Comments

Walt Basil said:

I’ve said it before, and I’ll say it again. Folks who need the extra quality of the HD experience are not the intended target audience of the Apple TV. The audience is intended for people like me. People who don’t notice the difference. I’m happily listening to AAC 128 and cannot tell the difference between that and lossless, or that and CD. I’m sorry if that offends people, but I consider myself lucky because of it. Because I can’t tell that difference, I can be perfectly satisfied buying songs and movies off iTunes. I acknowledge that there is a difference, and that many people can tell the difference. Good for them. Buy your DVDS. But for people like me, that won’t happen. I can tell you from my experience of playing my movies from iTunes over to my entertainment center – I love it, and would rather do that than buy a DVD or HD or BR. People like me, will buy and use the ATV, and it will definitely cut into our DVD spending. The day that all movies are available from iTunes that are available on DVD Tuesday will be the day I can put up my DVD player, or at least let it cool down a bit and use it only when watching some of my over 300 titles DVD collection.

I wouldn’t go as far as to say that the Xbox and ATV are “rivals.” Again, two separate target audiences. One is for avid gamers, and oh-by-the-way it also has movie viewing capabilities. The other is for people like me. I don’t know one person who bought an Xbox solely for the purpose of watching movies. ATV, on the other hand, is solely for watching movies. Yes it will do a few other things, like watching a photo slideshow, but face it, that’s not why people will buy one.

February 22, 2007 7:18 AM
Jack said:

Not only does Apple not have HD content, they don't have "DVD quality" content. And it seems some people buy DVD's, but I don't know anyone who does. Everyone I know uses Netflix, or goes to their neightborhood blockbusters. That is to say, people love to rent movies. So if Apple would let us renters download movies straight to the Apple TV (II) and let us keep, oh say 3 on there at a time for $20 bucks a month, and the movies were DVD quality or better, then that would be pretty darn cool. If I had a TV that worked with the Apple TV, and I don't plan on getting one until 2009 when I'll have to. Note that 60% of TV sales this year leading up to the superbowl were of the CRT vareity. Also known as the affordable kind. And the Xbox 360 connects to SD TV's. The Apple TV doesn't.

But as it is, I agree. Unless this dude knows something we don't, because I ain't paying no $10 a pop for a movie that I probably will never watch again; forget about $13 or $15 for new releases.

February 22, 2007 7:39 AM
Adam said:

I think it's pretty obvious that when the ATV comes out that itunes will start offering high def movies and tv shows.

Why else would it support 720p?

I'm not so sure about movies, but I can really see ATV taking over TV shows.

as it is now I don't even watch tv shows when they come on. I subscriptions to my favorite shows and I watch them in bed on my laptop.

and it's cheaper than tivo or buying or renting the dvds after the season is over.

So I wouldn't mind watching my tv shows on my hd tv.

But I haven't bought a single movie off itunes. Not big enough selection and with blockbuster online, I pretty much always have 3 new movies in my house.

February 22, 2007 11:17 AM
joecab said:

It is WAY too early to make decisions like this. 30%? They still don't have nearly enough of a movie catalog to pull something like that off. Plus the movies still aren't cheap enough for volume purchasing since you can get the actual DVD or get a Netflix account for a little more. Apple TV is one of the rare Apple products that I have zero interest in purchasing, and I'm a big Apple fan. I also don't own an HDTV so it's probably not my market anyway.

I don't think people will go out and buy an Xbox 360 just to play movies, but they probably won't be buying an Apple TV if they already own one. A dedicated device has a better chance.

February 23, 2007 11:54 AM

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