It appears Apple is working on some device with a screen size that is larger than today’s iPhone, yet smaller than an iPad.  Many of us have also been waiting in anticipation for what could very well be the next big thing in television.  But what if these stories are all related?

I have personally found the screen size of today’s iPhone to be too small for browsing television guides, Netflix movie listings and my own personal iTunes media library.  I may what to

read reviews, check out cast lists, and even review a trailer or two on my device before suggesting it to the rest of the family.  The size of the screen is much better on the iPad — that is until you try and take control of your home theatre system with it. It is simply too heavy and awkward to continuously use as a television remote.

But what if this new “in-between device” was more than just a content-browsing device or media playback controller? What if it is the manifestation of the “television” Apple has reportedly been working on?  There is actually some sound reasoning that the latest rumors regarding Apple’s purchasing displays in a new range of sizes would be best suited for a new way to interact with the next generation of television:

• Internet television without the wires. Getting away from set-top boxes, Apple is looking to re-define the way that we interact with the television set. Screen-based touch gestures is a given, audible Siri voice commands is doable and camera-interpreted motions may also be on their way.  But having the data entry point closer to one person lounging in a darkened viewing room makes more sense than placing such a control embedded inside a television all the way across the room for everyone to gesture or shout at.
• Closed platform helps control the market. Something else that is unique to Apple’s current Apple TV platform is that is it not open to developers. This can initially be a good thing for content providers, as it does not allow just anyone to create a new channel or media outlet.  At first, existing content providers would be given an opportunity to create and deliver content in a similar fashion as “apps” on the Apple TV are done today.  And why not open the platform to developers?  There just may be a new pre-packaged development API in the works.  Eventually this could evolve into a similar content packaging framework akin to Apple’s iAd Producer, Newsstand feature, iBook Author or even the same method used for creating an iTunes LP or podcast today.
• Exclusive list of supporting television vendors — at first. AirPlay for video is just too good to keep exclusively to yet another set-top box.  And like all new product announcements with Apple, there is typically a short list of early adopters that come on board. Similar to the way that AirPrint and AirPlay (audio) has been catching on with printer and speaker manufactures, AirPlay (video) could be adopted by more and more television manufactures. This would mean that this new Apple TV with a screen would not need to be tethered to an open HDMI port — it would stream content directly to the television using AirPlay, just like iOS devices do today through the Apple TV.
• Create new products rather than fragment existing ones. Since the Apple TV platform would continue to be closed to developers, this would actually help prevent fragmentation of the existing iOS platform and allow Apple to develop a completely different form factor for just the AppleTV.  Existing iOS developers would not be required to port existing apps in the App Store over to a different screen format and possibly a different user experience.  It would make more sense to create a common content delivery API based on the uniqueness of this new platform.

Buying up large quantities of a particular size of screen does not necessarily mean that Apple is coming out with a new form factor for an existing product line. It could very well mean that we are about to see a new product altogether. And it is just as likely that this new form factor will be the new Apple TV as it is likely that Apple will come out with a mini iPad or a jumbo iPhone.  Perhaps this new in-between form factor is what Steve Jobs was referring to when he claimed that Apple had “cracked the code” when designing a new way to experience television.  Who needs a table full of IR remotes when everything you need is right there in your lap?

Image courtesy of Flickr user mac_ivan

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I had high hopes for the new Apple TV. Really high hopes. So high that chances are Apple wouldn’t have been able to meet those expectations, no matter what. Because, you know, somehow I feel like Apple owes me something. Like it’s just there to make magical products for me and all the other consumers in the world.

But this Apple TV thing . . . it’s disappointing. It’s disappointing because it’s the most incremental of all incremental updates for a product that hasn’t been moving forward nearly as quickly as it should be. It’s disappointing because I have this amazing vision in my head of what the Apple TV could be, what it should be, and Apple is not doing any of the things I hoped it would.

Last week I laid out a road map for where I thought Apple TV was going. Or at least, where I thought it should go, based on the available hardware and software that Apple has at its disposal.

Basically, I hoped Apple would:

• Open up the Apple TV SDK and let developers have at it
• Create more-advanced integration between the TV and the mobile devices
• Enable navigation control and interactivity on the second screen

It seems obvious, doesn’t it? In part because Apple already owns the ecosystem and in part because competitors like Samsung are already doing this.

On Wednesday on Twitter I took things a step further, breathlessly predicting the Apple TV could upstage the new iPad. I even provided some predictions for which content partners might begin building for the new platform and what sort of capabilities might be enabled by doing so. It’s not just wounded pride or a sense of being completely and utterly wrong that makes me disappointed. It’s that the industry is moving forward, and in this respect, Apple is seriously lagging behind some of the competition.

Take a look at the latest update to Xbox Live or some of Samsung’s dual-screen apps. Even Google TV, for as little traction as it has gotten so far, has created an open app ecosystem that has some interesting interactive features built in. Now compare that to what developers can do on the Apple TV: bubkes.

It could be the improvements Apple made under the hood could eventually get the platform to where it needs to be to offer up the types of experiences I’m hoping for. And it could be the Apple TV’s potential will be fully unlocked once Apple releases iOS 6 during an event in the fall, with the eventual introduction of the next iPhone.

But for now I can’t shake the feeling that this $99 box has so much potential that is still completely untapped.

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Here’s a snapshot of key figures Apple shared Wednesday about its company, its iOS platform and its new devices:

• 76 percent: Apple revenue derived from post-PC devices in the last quarter of 2011
• 62 million: iOS devices sold during that time
• 315 million: cumulative iOS device sales
• 100 million: iCloud users
• 25 billion: app downloads from the iTunes App Store
• 585,000: total available apps in the store
• 15.4 million: iPads sold last quarter; which is more than the number of PCs sold by any single PC maker in that quarter
• 55 million: total iPads sold so far
• 200,000+ : total iPad apps
• 1080p: resolution on newest Apple TV
• 3.1 million: number of pixels in the new iPad display; a million more than a 1080p HDTV
• 264: pixels per inch on the new iPad Retina Display
• 73 Mbps: theoretical maximum LTE speeds of the new iPad (here’s why)
• 9.4 millimeters: thickness of the new iPad — a good thing, in my opinion
• 10 hours: expected battery life of the new iPad on Wi-Fi
• $399: new price for the 16 GB Wi-Fi iPad 2, which will hurt Android tablet makers

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Munster claims discussions with a “major TV component supplier” which had been contacted by Apple about its TV display parts lead him to believe Apple is still on track to introduce a dedicated television device in late 2012. However, there’s a caveat: Munster thinks if Apple can’t get a revolutionary new content model in place, then it won’t move on the market this year.

The analyst then goes on to suggest three possible scenarios that might constitute a unique Apple approach to the television market. Those potential solutions break down roughly as follows:

1. Changing the experience, not the service

In Munster’s first scenario, Apple would basically leave TV programming to existing operators and simply layer its own interface software on top, including menus, guides, DVRs and content discovery. Munster notes that Apple was expected by some to manage its own wireless network in the U.S. ahead of the iPhone launch, but instead partnered with AT&T and focused on UI and UX instead of content. Remember that apps came after the iPhone’s original introduction.

2. A hybrid content model

Apple could also partner with existing networks to offer live TV, and at the same time, deliver on-demand content from providers like Netflix, Hulu Plus or any other content partner willing to play via an App Store-style distribution channel, Munster suggests. It’s a “best of both worlds” type solution, and would probably still come complete with an overhauled UX, but might be trickier to negotiate than option number one, since it involves negotiating with two different types of content providers.

3. A la carte

Munster’s last option is a completely customizable, a la carte option that would see users subscribe to live TV packages from content providers. This would be the most revolutionary of the options in terms of the existing TV experience, but it would also involve a dazzling shift in the way providers make their content available, and the negotiations involved in doing so would be challenging, at best. In the end, there’s also no real guarantee that selective programming is what viewers are after, especially if existing, less flexible bundles from other sources cost less.

GigaOM’s Ryan Lawler wrote last year that Apple’s television effort was more about experience than about content, and described a likely outcome of Apple’s TV endeavors that pretty much mirrors Munster’s second scenario listed above.

Given the challenges involved in negotiating the third solution, I have to agree that a system that works with existing content sources, but also opens up the possibility of apps for different kinds of content makes the most sense as a solution that could still make big waves in the TV industry while also remaining realistically possible in the near-term. Which of Munster’s Apple TV predictions, if any, make the most sense to you?

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Tank Riders ($1.99 Universal, $3.99 Mac) is a good cross between a maze, puzzle and third-person shooter game that can be really fun in the right circumstances on the right devices. Thanks to well-thought-out maps, Polarbit has done an amazing job at keeping the gameplay interesting enough in single-player mode, while also making multiplayer competitive and fun.

Tank Riders has just two basic controls: one for steering your tank, and one for shooting.  As the levels progress, you’re faced more challenging level puzzles barring your way to the finish line, and more bad guys trying to stop you from getting there. Along the way, you can pick up extra health and special weapons.  But with the start of each level, you get set back to your tank’s starting configuration.

As mentioned, the maps are what make this game shine. In single player mode, crumbling walls and crates that can be destroyed make for a delightfully changeable environment.

What’s great about multiplayer mode is that you can have multiple online accounts on your iPhone, iPad and Mac to play against visiting family and friends.  So if you happen to have more than one Apple device at your disposal, you can set up a tournament in the comfort of your own home.

Tank Riders isn’t without problems. On the iPhone in particular, the screen is just too small to spot the enemy, navigate your tank, and shoot your gun turret all at the same time. I did, however, find that using the iPhone like a traditional game controller while playing the game on my HDTV through my Apple TV over AirPlay was a perfect solution to that problem.  On the iPad and Mac, you won’t have the same problem, and the Mac’s controls make the experience far easier.  So if you plan on going head-to-head with your friends in multiplayer mode, get the Mac version to gain the competitive advantage.

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Sterne Agee’s Shaw Wu has one of the more conservative estimates of Apple’s performance but still increased his firm’s price target to $550 from $540, citing the possibility of an impending iPad launch as a reason to trust in the stock’s strength:

For its outlook, AAPL guided above consensus, which is rare for a company known for its vintage conservative guidance. For the March quarter, the company is looking for $32.5 billion in revenue and $8.50 in EPS vs. consensus at $32 billion and $8.03 in EPS. While AAPL does not pre-announce future products, we believe this guidance implies that there could be an iPad update in the quarter, which is consistent with what we have been seeing in our supply chain checks.

Brian White of Ticonderoga Securities was far less conservative, raising Apple’s stock price target to $666. He talks about how Apple “crushed” Ticonderoga’s previous projections with its results in a note released on Tuesday evening, and he argues that Apple has room to run:

[T]his is clearly a quarter to remember and speaks to the momentum at Apple that we believe has further room to run, ultimately driving the stock to our 12-month price target of $666.

Canaccord Genuity’s Michael Walkley also raised his target beyond the $600 mark, increasing it to $650 from $560. He anticipates that Apple’s results might prompt the company to change its policy on paying dividends (via Forbes):

We believe Apple is likely to announce a dividend during 2012, potentially next quarter when crossing $100B in cash and cash equivalents.  We view this as very bullish for investors, as we believe a new group of investors seeking dividends would invest in Apple and drive shares higher.

Deutsche Bank also raised its estimates, putting Apple’s new target price at $600. Analyst Chris Whitmore said in a note to investors (via StreetInsider) that his firm also expects additional gains from a new iPad release:

[W]e expect iPad 3 in C1Q12 followed by an iPhone 5 refresh in the Fall. In addition, we expect Macs with Ivy Bridge should support incremental share gains and Apple TV appears set to graduate from an ‘Apple hobby’ later this year.

The list is much longer, of course, and Apple’s stock performance in early trading on Wednesday reflects the general optimism: As of this writing, it was sitting at around $447 per share, up $26.60 from Tuesday’s close.

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Apple initially intends to open mini-store locations, like those it currently uses at select Best Buy locations across the U.S. and Canada, in 25 Target locations in areas where a standalone Apple Store isn’t economically viable, according to the report. Target has 1,752 stores currently operating in the U.S., more than Best Buy’s roughly 1,100 locations. Apple now has store-within-a-store setups in more than 600 of those Best Buy locations.

Target stores currently offer iOS devices, including the iPod and iPad, as well as the iPhone in stores that have Target Mobile sales centers. The rumored expansion would allow the 25 pilot stores to begin offering sales of Mac computers, as well as other Apple-branded hardware and peripherals. Bringing Macs right into the stores could help capitalize on the so-called “halo effect” of iOS devices, which sees Mac sales increase in proportion to the iPhone and iPad’s success. Customers who come in to Target for an iPhone would be more likely to at least take note of and consider a Mac purchase, too, since all those products would be available for hands-on trial in one place.

This isn’t the first time people have suspected a limited retail partnership would lead to something larger. Back in December 2008, Walmart began selling iPhones, and then in 2009, Barclays analyst Ben Reitzes suggested that along with iPod sales they would be precursors to the store-within-a-store model being adopted at Walmart locations. So far, that hasn’t happened, but there’s good reason to suspect Target is a better candidate for this kind of setup.

The main reason is that Target appeals to a different demographic than Walmart. Target’s crowd tends to be closer to Apple’s core market audience, namely middle-class buyers with more cash to spend. Selling Macs, which are for the most part much pricier than iOS devices, is a good fit for Target’s customer base, especially in places Apple’s own retail shops can’t reach.

Photo: Some rights reserved by Chris Coyier

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The iTV cometh

There is one very good reason that Apple might want to secure broadcast rights for live Barclays Premier League matches: its rumored upcoming dedicated smart-TV set. If Apple wants to convince customers to buy into its platform, it must provide the crucial advantages that keep people tied to traditional television content sources like cable and satellite television. Live sports is one such advantage.

Apple could easily go the route of simply allowing users to access their existing content packages from cable providers and avoid its own rights negotiations, but that won’t provide any kind of game-changing TV experience that could potentially shake up the industry. Apple’s offering discrete digital delivery channels, like it does for some U.S. sports on the current Apple TV, provides live viewing along with other perks like the ability to re-watch past games and highlights on demand that provide a more tailored experience to sports fans.

Premier League has worldwide appeal

Despite Premier League’s English roots, it appeals to football fans worldwide. In 2011, 4.7 billion people tuned in to Premier League games, in more than 212 markets worldwide. It is the most watched football league in the world, and it is growing. In the U.S., viewership for Premier League games rose from a paltry 19,000 for one match in 2008 to 1.6 million for a recent 2011 game.

A Premier League partnership would add considerably to the value perception of Apple TV, both in the UK, elsewhere abroad and, increasingly, in the U.S., too.

Cash to burn

Apple also has the money to make a bid on broadcast rights for Premier League games. Morgan Stanley’s Katy Huberty recently suggested that Apple’s cash reserves could grow to $136 billion by the end of 2012, and they were at an impressive $81.6 billion as of last quarter. Paying $2 to $3 billion seems steep, but in exchange for a better chance of locking in the sizeable audience mentioned above, it could actually be a deal.

Whether or not this pans out remains to be seen. Apple is probably involved in lots of content negotiations regarding its TV plans, especially if it is planning on introducing a dedicated set. We will have to see if Premier League is one of the things that comes out of those negotiations.

Ed.: A previous version of this article spelled the name of the company incorrectly. It has been corrected to say Premier.

Photo courtesy of Flickr user rc!

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iPhone

Apple’s next iPhone is one many probably feel we’ve already seen in previews, since the rumor mill prior to the release of the iPhone 4S was focused more on the so-called iPhone 5. A lot of what was said about that device should probably come to pass when we do get a new iPhone next year, which Apple could well call the iPhone 5.

A release in fall is probably in the cards, since Apple would gain little by releasing a new iPhone in the early summer so soon after unveiling the iPhone 4S, so it’s hard to pin down anything definite about the device at this point; a lot can change in mobile in nearly a year, after all. But there are a few safe bets regarding Apple’s next smartphone.

First, expect an A6 processor, possibly quad-core, powering the device. Also, a larger screen and a new physical case design are almost guaranteed. I don’t think Apple would go the route of the Android-makers with anything gigantic, but a respectable 4-inch display seems likely. And while LTE still isn’t a guarantee, it’s a good bet for 2012. Near-field communication (NFC) is less certain to make the cut, since that tech still has a long way to go before (if) it goes mainstream.

iPod

Making predictions about Apple’s iPod line is definitely tough. The media player got virtually no changes in 2011 compared to 2010, and its impact on Apple’s overall revenue picture continues to dwindle. The iPod touch is still an important part of the lineup, but even its future might become a question sometime in the next couple of years.

In 2012, I see Apple finally putting its iPod classic to rest, and maybe the shuffle, too. The iPod touch will likely get the spec bump it missed this year, bringing it closer to the current iPhone 4S in terms of wireless radios and processing power, and possibly a physical redesign, too. The real question mark, and maybe Apple’s greatest opportunity to shake up the media player market, is the iPod nano.

Users have been looking for an update that brings Bluetooth on-board with the diminutive nano, making it compatible with wireless headphones (better when worn on the wrist) and possibly enabling a live data connection between it and the iPhone. I suspect that Apple skipped a proper update for the nano this year because it’s actually working on making the nano the perfect connected companion for the iPhone, thanks to Bluetooth 4.0 tech, but we’ll see in 2012 whether or not that’s the case.

iPad

Rumors about the iPad 3 are already swirling, since it seems on track for an early 2012 release. I think we’ll see it arrive around the same time as last year’s iPad 2, so between February and March, complete with the Retina Display users have been looking for since the iPhone 4′s release.

What else will the iPad 3 offer? That’s a good question, and one that hasn’t really been addressed all that much in early reports. Its features will be dictated largely by what the market demands, which shouldn’t be much judging by the current tablet market picture. In 2011, Apple ruled the tablet market without a real competitor in sight. In 2012, it will have low-cost alternatives nipping at its heels, but it still isn’t looking at any competitors who are truly shaking up the space.

As a result, I’d expect to see an iPad 3 that resembles its predecessor in most regards, with the aforementioned improved screen, as well as a slimmer design and maybe a longer lasting battery. Apple has the right recipe for success in other regards, and the iPad 3 isn’t really crying out for camera improvements or additional wireless tech. Adoption of Bluetooth 4.0 is probably also on tap, as well as an upgraded A6 processor, but I wouldn’t expect much else.

Instead of making dramatic changes or additions to the iPad, expect Apple to offer a low-cost option in the form of the iPad 2, likely limited to either 8 or 16 GB of onboard storage. And as much as I and Kevin admire the smaller, 7-inch form factor, I think Apple might keep that one in reserve for at least another year.

Macs

In 2012, iDevices won’t be the only devices getting big upgrades. Apple’s Mac division is still a big revenue driver for the company, and in the new year I expect them to focus on the products that will have the biggest role in the future of computing. The MacBook Air is the crucial device here, but iMacs, too, should be in for big changes.

The MacBook Air is Apple’s most forward-looking Mac, and it has plenty of room to grow. In 2011, the 11- and 13-inch form factors got even better thanks to much-needed processor upgrades and the addition of Thunderbolt tech. In 2012, I expect Apple to expand the line as it moves to push aside the MacBook Pro in terms of its importance to Apple’s notebook offerings. So a 15-inch Air is likely, as well as more substantial improvements to the 11- and 13-inch devices, aimed at shoring up their remaining weaknesses: battery life and storage. Higher resolution displays are another definite possibility.

As Apple’s strongest desktop product, expect iMacs to get significant updates in 2012, both externally and on the inside, too. The current iMac case design is getting a little long in the tooth, and is overdue for an update. Intel has new processors that will likely make their way into Macs in the works, and we should see them in the second quarter of 2012, so expect new iMacs around then, too. Other changes might include high-res displays like those that could make their way to the notebook line, and solid state storage as the default option on some models.

As to the rest of the Mac line, I’d expect to see upgrades for the Mac mini, but not necessarily any big improvements for the Mac Pro. Apple is clearly focusing on consumer products, and it could let its more powerful desktops languish again as a result.

Apple TV

It’s the last big question mark for Apple’s 2012 plans, the mythical iTV. I think we’ll see Apple make its move here, and introduce a television set late in the year, complete with a full App Store, Siri controls and iCloud support. Whether or not we’ll see its set-top Apple TV gets a similar upgrade strikes me as less certain, but since it could act as a gateway device the way the iPod touch does for the iPhone and iPad, I think we’ll see that, too.

This is the rough roadmap I see in place for Apple’s 2012 product plans. Predicting Apple’s plans is likely a fool’s game, but that doesn’t mean it isn’t fun. Let us know what you think is coming out of Cupertino in the comments.

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In a note issued Wednesday, Wu said Apple should enter the TV space in Sterne Agee’s opinion because it represents “the only major end market the company is not currently participating in a bigger way,” according to Wu’s note.  He  cites “several data points indicating activity from component makers to manufacturing partners,” as well as Apple’s own patents as reasons the firm expects Apple to throw-in with televisions.

Standing out in the market will depend on Apple doing two things, according to Wu. First, Apple “should produce both set-top box and integrated form factors,” something a supplier report from Tuesday suggested was indeed Apple’s planned course of action. By offering both options,  Apple stands to appeal to the broadest possible swatch of TV viewers. Set-top devices leverage existing HDTV hardware owned by consumers, while an integrated solution proves “a complete easy-to-use solution similar to an iMac, iPad and iPhone.”

I agree that such a solution makes sense for the reasons Wu gives, but Apple would also have to contend with the risk involved in offering a low-cost device with essentially the same feature set of a high-priced one, with the added challenge that its own integrated smart TV will come in a maximum size of 37-inches, if reports prove accurate. What incentive is there to opt for the Apple iTV over a set-top box in that situation? The answer, of course, may come in the form of some unreleased detail; local storage in a dedicated Apple set, for instance, or broad access to an App Store instead of a select number of hand-picked services, for instance.

Apps and content will be another crucial element to the device’s appeal, according to Wu. He echoes what we’ve been saying for a while now; an Apple TV set’s fortunes will depend heavily on what kind of content Apple can provide, and the way in which it presents that  content. Wu suggests IPTV might be one option for Apple to provide live broadcast television, but streaming app-based solutions for very specific verticals are also starting to emerge.

Finally, Wu says customized programming is something that Apple “would love” to offer its users. We’ve said before that a la carte offerings would indeed make the Apple iTV a truly disruptive device, but the challenge lies in convincing content partners that is indeed the way to go. Pick-and-choose programming is an idea that’s making inroads among cable providers, however, at least in some markets, so there’s hope we could see a high degree of content customization options in Apple’s offering, too.

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