Why Apple Should Build a TV

by Patrick Moorhead   |   September 2nd, 2011

While I don’t believe it, to many, it appears that Apple has already won the smartphone and tablet wars, so the next logical conclusion is “what’s next”. Many articles about the Apple in the TV business rumors (not to be confused with the “hobbyistApple TV) focus on what a lousy business TVs are or questioning if Apple could add enough incremental value given cable and content companies have the power position. These are good and pragmatic reasons, but then again when has Apple been pragmatic? I see nothing pragmatic about expensive MP3 players at 2X the price of others, paid music downloads or app stores 10 years ago. I personally would like to see Apple enter the TV market.

appletv

TVs and STBs Have Big Issues

Let’s face it, TVs aren’t very easy to use, especially when they are connected to a set top box (STB). Most of us tech-heads forget just how literate we all are with technology. Just ask a less tech-literate person to change inputs on the TV to go from the set top box to the DVD player. Many times they have “Channel 3″ written down somewhere so they remember. Ever lost that remote? Sure you have and it really pissed you off. How about a set top box from a cable company? Mine takes almost a second to change the channel. And why do I keep running out of storage when I have TBs of secured storage in other parts of my house? I know what you are thinking… too complex, too many companies involved with too many conflicting agendas. Well, I’ve heard that same short-term thinking before with digital music.

uglyremote

Big Problems Need a Fearless Company like Apple

Apple has a solid track record in fixing those issues that have plagued users for years. Apple has significantly moved the industry in:

  • Simple digital content downloads
  • Application purchasing and updating
  • UI simplicity
  • Computer boot time, wake from sleep time
  • Reliability and dependability

So Apple fixes huge issues and TVs and STBs have big issues. It sounds like the perfect match.

A Bold Assumption on Content and the Distributors

My assumption is that Apple will find a business model the content providers will find advantageous or tempting enough to cross the cable and satellite companies. If not, then you would expect them to declare war and do everything in their power to circumvent this by investing in the “pipe” or content companies themselves. This market is too huge and too big an opportunity for the most valuable company on the planet to pass up. I know, this sounds impossible, but when Napster arrived on the scene, how plausible did iTunes sound? How plausible did downloadable movies sound with bit-torrent around?

So why should Apple make a TV? Because there is so much they could improve and people will pay a hefty premium to have a superior experience in a few different areas.

Finding Content via Advanced HCI

Controlling a device with 1,000s of “channels” makes absolutely no sense with a physical remote like we have today with up and down buttons and even numbers. This would be like instead of having Google web search as we have today, we were stuck with Yahoo directories and no search. Directories made sense until the options exploded, like we have today with content.

Apple is one of a few companies who could master controlling the TV’s content via voice primarily, then secondarily air gestures for finer grain controls. First, the TV needs to be smart enough to determine who in the room has “control” and who doesn’t. It’s the future problem of today’s “who has the remote” issue. Then it needs to separate between background noises and real people if you are to have the best voice control. After you have found what you want to watch, you can fine-tune with the flick of a finger. This takes technologies even more advanced than the Kinect to pull this off, including the right sensors and parallel compute power delivered by OpenCLTM frameworks.

Apple Device Integration

If Apple developed a TV, they could conceivably guarantee that the iPhone, iPad, Time Capsule and Macs could seamlessly share content between each other. We have seen from the issues with Android and webOS on getting Netflix and Hulu+ that content providers are more apt to license when there are more closed systems.

As I am watching my NFL Football game, I want perfect, real-time sync of stats on my iPad, and want to be able to carry the game from the media room with me on my iPhone into the kitchen. I’d like overflow content storage to go to my Mac, PC, or Time Capsule. Finally, I would also expect to see sharing of basic sensors like cameras, microphones, gyroscopes, proximity sensors, and accelerometers to extend and facilitate security, monitoring, and gaming applications.

Apple Basics

I would want some of the basic positive characteristics I get in my iPhone and iPad in my iTV. I would expect it to be very responsive, reliable, and with a sense of awesome style. My set top box or my TV is neither of these. I would know that every differentiating feature would work well or it wouldn’t be included. I would also expect some key 10’ UI apps as well.

Conclusion

I believe Apple can and will be able to arrive at a business model with content providers and cable/satellite companies. Either that or it will get very ugly for everyone. The most valuable company in the world with a huge pile of cash, no debt and a historic track record of pioneering breakthrough content deals can do this, or if forced to will go around it. Apple has been a company that fixes those nagging problems, and the TV and STB have a lot of them. Our basic method of finding content is broken. STBs crash and are slow and don’t work with other devices in the home. I’d like to see Apple fix these issues. How about you?

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Patrick Moorhead

Patrick Moorhead was ranked the #1 technology industry analyst by Apollo Research for the U.S. and EMEA in May, 2013.. He is President and Principal Analyst of Moor Insights & Strategy, a high tech analyst firm focused on the ecosystem intersections of the phone, tablet, PC, TV, datacenter and cloud. Moorhead departed AMD in 2011 where he served as Corporate Vice President and Corporate Fellow in the strategy group. There, he developed long-term strategies for mobile computing devices and personal computers. In his 11 years at AMD he also led product management, business planning, product marketing, regional marketing, channel marketing, and corporate marketing. Moorhead worked at Compaq Computer Corp. during their run to the #1 market share leader position in personal computers. Moorhead also served as an executive at AltaVista E-commerce during their peak and pioneered cost per click e-commerce models.
  • RMG

    How about built in surround sound from the logic suite for air play speakers that require no wires, drilling, running wires through walls and figuring out how to use that receiver with 20 cords coming out of the back. The speakers would also self adjust perfectly based on where you place them

  • Amused Spectator

    It is a real hoot to see all these opinions about what Apple should do. Fortunately, Apple follows its own path. Remember when the pundits and experts wanted Apple to make netbooks? Hmmm, where are netbooks now? Apple not only eclipsed them, it virtually phasered the market.

    If, and that is a big if, Apple enters the television market, it will be when it has a very complete package that will simplify the usage and tie things all together neatly. Look at Bose selling a television now. Let’s start a pool to determine when it quietly disappears from the stores.

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  • Paul

    I don’t see a need for Apple to make their own TV, if they build a more advanced Apple TV (more like a MacMini but lower cost), they can still have the streaming and itunes markets using every manufactures TVs, and not have the headaches of trying to be price compeditive with the same companies they buy the LCDs panels from.

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  • Anonymous

    Apple will want to establish a clear and substantial benefit for consumers (not improved) and be able to garner the benefits of the risk and innovation by creating a big barrier to copy cats. Given their primary hardware competitors operate primarily as copy cats with lower prices this will significantly compound Apple’s challenge with content makers and current distribution channels for the content.

    Therefore, I do not anticipate the kind of disruption Apple engenders with a boom to end users/consumers to happen soon.

    I would dearly love to see the industry (hardware, distribution, and content providers) undergo a major redo that would drive innovation, the environment remains very hostile to this kind of change with enormous vested interests, public that would welcome the changes but also copy cats for cheap, and Government suspicious of major change that impacts powerful interests, DCMA and ISPs as police.

    • Anonymous

      +1. You KNOW that Apple has given 100 X the energy to strategizing where it’s going with TV than our thoughtful host, and yet, all we hear are Jobs’s “orifices” discussion about why GoogleTV would fail (200% right on that!) and why Apple was just nibbling around the edge.

      Part of the problem, as Horace at Asymco.Com highlights: there’s only so much intelligence that TV needs: pick an item from a pre-defined (if increasingly large) list, push “Play” and sit back.

      Meanwhile, all the deals and plumbing behind the scenes are complex, tuned to the economic advantages of the incumbents, and there’s not a weak-hands incumbent like AT&T who’ll help you break into the business at the risk that you’ll disrupt THEM out of business.

      I think you need a couple more years of cord-cutting, or a large share of individual content producers feeling screwed by BigCable cutting them off in various markets as negotiating strategy, or some major shift in how people want to watch TV (“intelligently”) before Apple has a move they can make.

  • Daniel

    People forget about the TV nonsense they already accept. My first request: One remote to control them all, not two or three. Second: do you you enjoy channel surfing through 100 channels? How about the ability to organize your networks (or individual shows) into folders for easy access like: Kids Networks folder, News Folder or Favorites Folder ? Just to start!

  • John J. Stevens

    Let’s think back to the days of “The Jetsons” cartoon. Well, those of us who can. Younger folks have seen a great many movies with central computer systems for entertainment, home & business management, time management and executive assistant features and so on.
    The day is hear. Steve Jobs talked about the Mac being the digital hub in our lives. Until something greater comes along the internet pipe, whether it’s cable, FIOS, DSL, Wi-Fi or Satellite is going to be around for a while. Who is better than Apple on the interface and integration of hardware. No one. Flat and simple. Now, consider a Mac computer, probably a tower, tied into your home or office or even automobile. It’s in turn tied into the internet. All of our Apple devices already talk to the net and one another nearly flawlessly. Sure, it can be done with other hardware. I’m sticking with the guys who keep it simple.
    Now, that foundation being laid, let’s consider the optimal audio/visual interface for everything from games, media entertainment, news and other sources of sought after information, telephone/teleconference, home utilities efficiency management, internet transactions, and so on.
    We have our PC’s (Apple included) and we have our handheld devices. Had this super interface that links (almost like AirPlay does now) with every other device and do all the other stuff.
    If Apple made such a screen, with all the chips and bells and whistles, with everything going through my own computer and interfacing as I wish to configure it, I’d be the first in line.
    Nobody is better. OK, sure, make a version where the uber geeks can jailbreak them, mess with the boards and hack new ideas into them.
    But, that, my friends, is the future.
    CD’s and DVD’s (Blue-Ray and otherwise) are already dead. TV as we know it is nearly dead. It’s all going to come through one pipe. Your home telephones are already digital, if you even have one. Hughes and KVH, Inc. can already provide you with whatever you want wirelessly through satellites. KVH, Inc. can do it on your boat, your fleet, you vehicles, or anyplace else that can see the sky.
    I’m going with them. No more wires. Give me the big screen that is made to function with all the rest.
    Yes, Apple should be our choice to give us all that. They already “CAN” do it.

  • Anonymous

    Fantastic! Agree with you, even if my reaction is more wishful thinking. At least now I can point to your column for solid reasons Apple should and will do this!

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  • Watcher

    All the people writing about an Apple TV seem to think the US is the whole world. TV is a way bigger mess worldwide than even the the music industry – might be too big mess to be worth touching. Also Apple is about profits and the profit in the TV market is small. People don’t change their TVs often enough – I just replaced one that was 15 years old or so and certainly won’t be replacing my current one in the foreseeable future, not matter how good an offering from Apple.

    • http://twitter.com/Alex_Manchester Alex Manchester

      People are replacing their TVs pretty frequently these days, and a lot of the reasons why Apple wouldn’t enter – people said similar things about phones pre-iPhone.

      Patrick – I really like the angle here and agree it could well be worth it for Apple as the current situation is a mess. For Apple, there’s lots of rich content which they have got a lot of knowledge and understanding about, there’s lots of opportunity to come in and completely change an industry that’s screwed about and made too many mistakes, and where the big players (Samsung, Sony and LG) have, in other markets, already proved they cannot compete with Apple’s strategies and product design. It’s not hard to think of a future situation where pretty much every home entertainment and portable electronics device one person owns is made by Apple. It’s really not a big leap. Hadn’t thought of it this way before.

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  • http://de-de.facebook.com/montymetzger Monty Metzger

    Steve Jobs already talked about the idea of a Apple TV Flatscreen last year at D8:
    http://blog.monty.de/2010/07/apple-flatscreen-tv/

  • Anonymous

    Dude, I know I would sure buy one. Apple is just cool like that.
    real-privacy.it.tc

  • http://twitter.com/dpgj 最终冰器红豆

    Sometimes I wonder if those engineers actually used the product at all.

  • Anonymous

    I’m totally skeptical of an Apple TV. The fundamental problem here is that display panels are commodities. Even if Apple came up with a seamless way to integrate directly with the cable plant, people wouldn’t replace what they have unless it’s broken. It might bias their purchase decision but Apple will never drive it. Price is likely to be a much higher driver of their selection.

    Another thing to consider is that the MSOs have zero interest in giving up their cable box revenue so they’ve made cable cards almost impossible for the mere mortal to use. Their attempts to do soft cable cards are a nightmare (tru2way) and I believe there are currently no manufactures selling compatible devices (panasonic dumped their sorry butts last year). I don’t see Apple getting that religion so what value does ATV bring to the table that would justify above commodity pricing? Putting roku like functionality into a TV ain’t going to do it.

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  • http://twitter.com/Ascott707 Alan Scott

    I would settle for apple finally embracing blu-ray and touch screens on all of their devices before they try and expand more. I suppose even the Apple TV’s would refuse flash content? how about solving current issues before picking another fight.

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