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Summary:

Despite high early expectations, it wasn’t long before Apple TV was demoted to “hobby” status. But that could soon change, as there’s new evidence that Apple is looking to make a serious business out of online video with a major update to its Apple TV product.

apple tv

When Apple TV was launched in 2007, Steve Jobs said he expected it to be one of the four legs of the company’s business, making it as important as the iPhone or even its iTunes. Despite high early expectations, it wasn’t long before the device was demoted to “hobby” status by the Apple CEO. But that could soon change, as the New York Times has uncovered evidence that Apple is looking to make a serious business out of online video with a major update to its Apple TV product.

According to the Times, Apple is working on updating its Apple TV software and has hired several user interface and graphics designers with a background in broadcast design in television to create a “completely redesigned interface for it.” Not just that, but that work on the next version of the product is not happening in the existing Apple TV group, but in a new design group within the company, which could signal that the company plans to release a totally new product rather than an update to its existing Apple TV.

The new product could use iOS, which is already used by the iPhone and iPad, as its operating system, though it’s not certain Apple will go in that direction. If it does, however, the new Apple TV could allow developers to create apps for video channels, or even reuse apps that have been created for the iPad to display video on their TVs. Since the launch of the iPad in April, a number of video publishers — including Netflix, ABC and now Hulu — have created popular video apps to run on the device.

Of course, reports of a new Apple TV aren’t entirely new; Engadget reported in late May that a new video product incorporating iOS and similar hardware to the iPhone was in the works. According to that report, the new Apple TV would use flash memory rather than the current product’s dedicated hard drive, would rely on streaming (rather than downloads) for video, and would be priced at just $99.

Apple’s hope, especially if the new Apple TV is sold for $99, is that it can make up for the low price with app sales and sales of digital media over the device. The company has been in discussions with content owners about different possible ways to do that, including lowering the price of TV shows sold through iTunes to 99 cents. The company has also reportedly considered launching its own subscription video service, offering access to multiple TV shows for $30 a month.

Reports of a new Apple TV are surfacing at the same time that competition around the connected TV space is heating up. Google launched its connected TV operating system at its I/O developer conference in May, with product planned to ship later this year, just in time for the holidays. Best Buy is getting into the digital video space by licensing Sonic Solutions’ RoxioNow platform, and Wal-mart bought Vudu earlier this year to pursue its own digital video strategy. Not to mention, all the major consumer electronics manufacturers, including Samsung, LG and Vizio are busy rolling out broadband-connected TVs and Blu-ray players with different digital video services built in.

Related content on GigaOM: The Case For Removable Media on the iPad (subscription required)

  1. Poo-poo a product you couldn’t make work only see someone else’s blueprints and all of a sudden you’re interested again? Typical business behaviour…

    Good luck to them anyway, I always had a soft spot for AppleTV, despite hating every other piece of hardware they’ve released in the last decade.

    Also, streaming is a terrible idea. Even if everyone on earth had 1GB internet it wouldn’t justify the extra energy and CPU time wasted by every machine on the hop.

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  2. I don’t know about that Ben. Streaming TV on demand has several advantages. Discs don’t have to be carried about in trucks or stored in warehouses. We don’t have to waste money storing them locally since many are only watched once. It uses less bandwidth than normal downloading and the streams can be cached and queued up when the viewer is ready. Back libraries of programs can become available individually or for an all you can eat subscription.

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  3. [...] NewTeeVee [...]

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  4. This space is ripe for the picking. I am just waiting for a viable alternative to cable.

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  5. I think Apple moves beyond an OTT device and goes straight into TV manufacturing. See my post: http://bit.ly/dy8woA

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  6. [...] there are indications that Apple might be forced to start streaming, based on reports about the technology specs of the next Apple TV set-top box. Earlier this year, Engadget reported that the next-generation Apple TV will use iOS, the same [...]

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  7. [...] Recent comments made by CEO Steve Jobs in reaction to Google TV indicate that Apple’s approach towards innovation in the set-top market is, in his words, to “go back to square one and tear up the set-top box and redesign it from scratch.” Those remarks are in line with reports that Apple is planning to make a major update to its Apple TV product. [...]

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  8. [...] rollout of Apple’s streaming video service could coincide with the introduction of the next version of Apple TV, which is expected to be sold for around $99. The device will reportedly run the iOS operating [...]

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  9. [...] rollout of Apple’s streaming video service could coincide with the introduction of the next version of Apple TV, which is expected to be sold for around $99. The device will reportedly run the iOS operating [...]

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  10. [...] rollout of Apple’s streaming video service could coincide with the introduction of the next version of Apple TV, which is expected to be sold for around $99. The device will reportedly run the iOS operating [...]

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