News, info, and opinion by Mac users, for Mac users.

March 21, 2007

speculation

This TV augur needs a new Magic 8-Ball: why the Apple TV won’t bomb

Posted Mar. 21, ’07, 9:57 AM PT by Dan Moren
Category | Apple » Speculation

Phillip SwannPhillip Swann of TVPredictions.com, whose predictions for the year 2006 included both miscalls like “Yahoo to buy TiVo” and painfully obvious prognostications like “Several More HDTV Networks Will Launch in 2006,” has this morning posited four reasons that the Apple TV will bomb. If there’s one thing an itemized list of reasons deserves, it’s a list of itemized reasons refuting them. So here we go.

1. Limited Uses
Apple TV can not receive or record cable or satellite signals, meaning it can not deliver the programming that 85 percent of Americans watch every night. The set-top also does not operate as a DVD player, which people are watching when they are not watching cable or satellite.

Now, you might argue that Apple can sell $1.99 episodes of cable or satellite programming, but thus far, the company has not been able to do that successfully on iTunes (or via the video iPod.) TV viewers have not demonstrated that they will pay for programs that could have been watched for free on broadcast networks or recorded for free on their DVRs when they originally aired.

Okay, first off: at the moment, no, the Apple TV isn’t going to bump your cable, satellite, or DVD set top boxes off your entertainment center, nor is it intended to. It’s an ancillary device right now. Lots of people buy TVs that have speakers in them, but that doesn’t mean that plenty of them don’t hook their TV up to their stereo for better sound.

As for the argument that Apple “has not been able to [sell episodes] successfully on iTunes,” I think that the number 50 million—as in 50 million TV episodes sold as of January 9th—would take issue with that theory.

2. Set-Top Fatigue Americans are tired of buying set-tops for TV-based purposes. They already have a DVD player; a cable and/or satellite set-top; possibly a standalone TiVo DVR and/or DVD recorder; a video game console; and in some cases, a Audio/Video receiver connected to their TVs.

And now Apple is telling them to get another box so they can stream videos, music and photos from their PCs?

Fat chance — even if the set-top will send the signals wirelessly; Americans have set-top fatigue.

Wait a second—if most Americans already have a DVD player, cable/satellite, DVR, video game console, and receiver, then why the hell are you complaining the Apple TV doesn’t have that functionality? Can’t have it both ways, Swanni.

The set-top fatigue argument is semi-solid: I do kind of doubt that Apple TV will get the blockbuster reception analysts have been predicting, but I think it will sell well.

3. Compatibility & Confusion
The device is set for a widescreen so it will not work with most older analog sets. But even more damaging, the device’s concept is too confusing for most Americans. Buy a set-top that will sit in the corner and send files to my TV? Do you really see a large number of people in this country actually doing that? Come on, the Media Center PC, which the Apple TV emulates, has not taken off so why should Apple TV? Despite what some might think, this is not a tech-savvy nation.
Yeah, I’m pretty bummed about the lack of compatibility with analog sets. But I will at some point have a widescreen digital television, as eventually will most Americans. And while we may not be a tech-savvy nation, I dispute that the Apple TV is any more complicated than trying to use the Video on Demand capabilities of my parents’ Verizon Cable box. In fact, given Apple’s skill at UI design, I’m betting it’ll be a whole lot easier than both that and the Media Center PC.
4. Inconvenient
Apple TV requires you to download your content to your computer before you can send it to your TV. In other words, if you want to watch a music video from iTunes, you must first purchase it online, then download it, then store it on your Apple TV and then transmit it to your television. Sound like fun?

So, although the tech-intelligentsia will slobber over Apple TV and call it the Second Coming, Apple TV will fail to reach beyond the cultish Mac audience, probably topping off at about three million homes.

Not being able to buy content via the Apple TV is, as I’ve opined, one of the major weak points of the device. That said, I’d guess Apple is working on this for one of the subsequent iterations. And the fact that you can stream video from your computer to the Apple TV without syncing it goes a long way towards dealing with the inconvenience.

Now, we’re still awaiting details from the first users to get their hands on the device, but I’ll say this: Swann has a couple of good points here. The Apple TV is a little “out there” for the average red-blooded, TV-watching American. And its (as far as we know) lack of compatibility with other formats makes it less appealing to hardcore geeks who love their DIVX.

But neither of those is necessarily the Apple TV’s target demographic. We’re still primarily talking about a device that will be attractive to early adopters, just as the first model of the iPod didn’t achieve critical mass immediately. Underestimating Apple is never a smart move. I think the first version of Apple TV will be a modest success; enough so for Apple to roll out a second model within the next couple years that will add online content purchasing and HD content for iTunes. Then it’s time to start talking about changing the world.


7 Comments

Moe said:

When Apple TV was announced, I was ready for the purchase and noticed that you REQUIRED a widescreen digital tv, which made me a "passerby". However, your last point is an interesting one. Who will pay $300 for this device and in another year, pay another $300 for generation 2. Obviously you are going to want the functionalities you mention that will be in G2 version. Will this be another iPod? Where each year we have to "upgrade" to get the latest and greatest feature? I think it works for the iPod, but when my 5 year old cable device does what its supposed to and I don't have to replace it every year, I think you get an advantage.

I like to see Apple TV succeed. I think it will... however, the demographic are those who are heavy "downloaders" of iTunes content. I guess that's how Apple will get you. First with iPod, then with their computers, then with the Apple TV. Now we have a nation of Apple users. Smart strategy, if you want to increase your market share.

March 21, 2007 10:17 AM
Tedious said:

I expect H.264 to become very popular among file traders.

I expect it will take several months of steady sales before the AppleTV is considered a "hit".

March 21, 2007 11:51 AM
Walt Basil said:

I seem to recall almost the same dire predictions for the iPod, and even the mouse... Speaking of which, does our friend Dvorak have anything to spout about this like he did with the mouse?

March 21, 2007 12:11 PM
Dave said:

Not only has Apple already sold 50 million episodes. It did so without a solution in place to watch those episodes on your TV. The Apple TV promises to improve movie and TV sales on iTunes.

I expect direct access to the iTunes store from the Apple TV to come in the form of an update rather than a new box. The trick, it seems to me, is navigating the store with the Apple remote. Pressing up and down around the current interface will not do for Apple. It will require a new presentation.

March 21, 2007 12:37 PM
R. Daneel said:

Not being able to buy content via the Apple TV is, as I’ve opined, one of the major weak points of the device.

Yeah, that would be nice. But Amazon Unbox, a major competitor to the video offerings of the iTunes store, also makes you buy programs at your computer, then download it to your Tivo.

(Of course, I purchased an Unbox download, and it still hasn't shown up on my Tivo -- and I'm not alone on this. Frustrating.)

March 21, 2007 1:26 PM
Dan Frakes said:

You know, it's so much easier to take someone serious after he plays the "cultish Mac users" card.

March 21, 2007 2:42 PM
George said:

Dave:

What do you mean there was no solution in place to watch them on a TV? The few episodes of TV shows I've downloaded from iTunes I easily watched on my TV via my 5th gen iPod and a $15 cable. Yes, that makes it close as expensive as AppleTV, but I also got an iPod in the process.

March 23, 2007 4:23 AM

Leave a comment

 



Visit other IDG sites: