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The Perfect Apple for the Living Room

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Apple’s bland launch of a thinner Nano left the Mac faithful craving more. Now rumors are flying around the Net about a new device, with Apple retailers being asked to return their existing Apple TVs by Sept. 30 and mysterious placeholder SKUs showing up in Future Shop’s inventory system.

Apple (s APPL) dominates music and consumer mobility. The MacBook is selling in record numbers. But despite making consumer-friendly products for the whole family, Apple has failed in an increasingly important market that includes TV, movies, music and gaming, and will soon encompass videoconferencing, education and more: The living room. [digg=]

If Apple wants to be the digital hearth, it will have to do better than AppleTV, and the impending announcement may launch just such a product. So what would the perfect Apple consumer device look like?

  • TV tuner and set-top PVR to take on TiVo, with streaming and synchronization to Apple’s mobile devices, the way Slingbox does, handled through a more reliable MobileMe
  • Controllers with accelerometers and a set-top App Store to rival what’s on the iPhone and iPod Touch
  • Videoconferencing-capable features to connect a distributed family via iChat
  • Computing features (mail, documents and so on) that make it a decent set-top computer terminal
  • Broad support for emerging wireless standards, so it looks like a file server to other devices
  • Better integration with stereo systems, tied into the whole family’s iTunes accounts, on par with Roku or the audiophile-friendly Squeezebox
  • Good cosmetics so it can mount cleanly to a wall or behind a flatscreen

Why should Apple get serious about the living room?

1. Get iTunes into the home. Apple has the industry’s most successful entertainment delivery infrastructure, and Jobs has strong ties to the industry through Disney. But the company has failed to connect that infrastructure to consumers beyond iTunes and the iPhone. AppleTV is little more than an iTunes connector for televisions: Not enough TV to tackle Tivo, not enough mobile streaming to supplant Slingbox. Apple CEO Steve Jobs called it a “hobby.”

2. Push back at the consoles. Gaming has given Microsoft, Nintendo and Sony a shelf slot next to the TV. Nintendo’s Wii has especially broad appeal and is encroaching on learning and teaching with almost Apple-like individuality. But with the exception of casual iPhone games and some Mac software, Apple is shut out of the lucrative gaming industry.

3. Casual gaming. The success of Apple’s App Store (with 100 million downloads in the first 60 days) has given Apple a glimpse of how lucrative gaming can be. Casual gaming, which the industry estimates is a $2.25 billion industry, has a much broader market appeal than hardcore gaming — think boomers and kids weaned on Webkins. With an Intel-based chipset and plenty of casual games, the company could make iPhone games run on a set-top box and ink a deal with Disney to target the younger set.

Apple’s strong notebook and phone sales mean the company has a chance at mainstream households. If it’s going to win that war, it needs to leverage its mobile and entertainment strengths and take the fight to the heart of the household with a strong set-top offering.

39 Responses to “The Perfect Apple for the Living Room”

  1. I admit it, the iMac is one impressive piece of hardware!
    Why the heck HP, Dell, Compac, Leveno, Matel, Sony…. can’t make a computer this sleek, beautiful and powerful is beyond me.
    HOWEVER, as nice as this computer seems to be it has one huuugggeee flaw, THE SOFTWARE! These things come with some lame Vista rip-off OS installed! This is simply unacceptable.
    Wipe the hard drive and install Vista Ultimate, this thing should really purr with a bonafied MS OS installed! Imagine how well this thing would run Publisher, Paint, Access, the clock, Fax Viewer or Command Prompt! I felt so strongly about this that I called Jobs (the real one) himself and told him that Apple should abandon all of this “X” and “i” stuff and just make hardware like the other regular computer companies, let Microsoft worry about software, the development savings would be tremendous!
    My answer was about 30 seconds of silence (bad iPhone connection), then he said, “uh, well, ummm thanks for the suggestion Mr Ballmer, I’ll take it under advisement and give it all due consideration”.

    You know, Jobs may not be as dumb as I thought.

  2. Mark is right. Your list of features reads more like a Microsoft product. Plus many of the products you mention have probably not equaled the sales of AppleTV. Apple needs to simplify. I don’t expect anything this year, but I think AppleTV needs to make its way into a TV.

  3. Apple TV 2.0
    -Blu Ray drive OR ability to recognize DVD external DVD player, TiVo as a source
    -1080i capability
    -on/off switch
    -firewire ports/usb ports = hub
    -acts as base station for network? AKA media hub
    -Sirius/XM integration with links to iTunes for purchasing? (probably never…)

    -wireless sync for ALL devices (AKA iPhone, iPod touch) on local network
    -master/client library system -treat laptops as devices & allow syncing of playlists
    -embed SD video in HD video/allow automatic compression/downgrade HD files to SD for iPod/iPhone viewing AKA automatic downgrade of lossless files to 128 kps on the shuffle (instead of 2 files for the same show – confusing)
    -Sirius/XM integration with links to iTunes for purchasing? (probably never…)
    – online radio integration (via WiFi, NOT FM!!!) with links to iTunes for purchasing?

    iTunes store:
    -better movie ratings/reviews – maybe restrict reviews (like the app store) to movies that you have bought/rented – “OMG best EVAH clik YES if U agre!!!!!!”
    -better social networking of the reviews – anything would be better – look at Digg, Amazon, IMDB, for examples

    Apple TV/Front Row software:
    -faster basic navigation – arrange remote so that double click on Menu takes you to the double pane home screen instead of ‘click, click, click, click, click’
    -faster ‘My (Media)’ navigation – a long list of names in alphabetical order can take FOREVER – maybe use grid view and/or have it like on the iPhone – artist/album name in alphabetical order, but on the right of the screen, a small alphabet that you highlight & takes you to all the artists/albums/songs that start with that letter
    -widgets for weather, traffic, sports scores, movie times, etc.
    -??? RSS reader. ??? Background AIM/Chat feature with on/off function (doubt it but would love it – few would use it, go after low hanging fruit first)


    Media issues: (not really under their control)
    -extended rentals for movies
    -ability to rent TV shows
    -once media/movies added, is not removed – always available to rent/purchase
    -integration of online streaming sites with links to iTunes for purchasing/rentals – AKA Hulu,, etc
    -Sirius/XM integration with links to iTunes for purchasing?
    – online radio integration (via WiFi, NOT FM!!!) with links to iTunes for purchasing?

  4. Apple is all about simplicity so building out a swiss army knife media center does not make a lot of sense. TVs are a commoditized, ultra competitive business so that doesn’t make a lot of sense.

    The most logical path is for them to build upon their unfair advantages around iTunes and App Store (and the underlying platform play) and continue to grow out the functionality of the Remote app for iPhone/iPod touch.

    This positions them to go after universal remote market and living room “companion applications” segment vis-a-vis new software and/or hardware form factor variants of iPod touch.

    The premise of iPod touch/iPhone as a controller of Apple TV opens up some interesting home entertainment application scenarios, something I blogged about in:

    Apple, TV and the Smart Connected Living Room

    The key point is that that assumes retrofitting Apple TV so that it runs the iPhone 2.0 software (without the phone as is the case with iPod touch).

    Check out the post if interested.


  5. @Dave’s Lounge: I think you’re pretty close to the money for this release, and yes, putting in a TV tuner may cannibalize iTunes revenues. But I also think consumers won’t want a PVR, an iTunes box, a video streamer, and so on — they’ll expect consolidation.

    I also think Nintendo proved that simple games emphasizing group play over graphics can be a lucrative market with broad appeal, and many of the casual games on the iPhone will port to a set-top box fairly easily.

    @Jesse, I’m not sure Apple wants to make 48″ TV screens for the home. Dell tried that and stumbled. The home monitor is the center of a digital hearth, with lots of things plugging into it. People won’t upgrade their flatscreen each time a new console comes out.

    @Shelley: Yep, unlikely it’s this big a deal on short notice, but I do think this is the roadmap if Apple wants to be in the living room. Plus the DVD slot, as @David mentions.


  6. Jesse Kopelman

    At some point, the AppleTV needs to become an actual television set, rather than a box. Even plugging in a simple box is too hard for tens of millions of potential customers — they want a single device and a single remote. Not only that, but there are still more people who don’t have a decent HDTV than those that do. Basically, AppleTV should be an iMac with a bigger screen. Once Apple sells a few million of those, they can worry about a add-on box version of AppleTV for people who already have a decent HDTV.

  7. My wife and I just got rid of Comcast cable and were planning to get a Mac Mini as the center of our living room – using Hulu, Joost, Netflix and other services to provide access to our content.

    The new Apple TV should be a Mac Mini/Apple TV current-gen hybrid, otherwise I will just buy the Mac Mini and hook that up to my flat screen I am buying.

    A built-in DVD player is a must, as well as a browser. The DVR part is completely worthless IMHO since all content is moving to on-demand anyway. Between Hulu, Joost, Netflix and the iTunes store, I don’t need cable and so don’t need a DVR because I am not watching live content.

    I guess I better wait before I buy that Mac Mini.

  8. Apple isn’t rolling out a new box with only a couple of days notice and a possible web cast.

    I think we can look forward to a price drop on the box, a software upgrade to allow AppleTV owners to buy HD TV shows directly on the box, and possibly some TV and/or Movie price changes.

  9. @quux:
    It’s too bad that the cable companies would never go for it. They want to control the box, OpenCable be damned.

    I would _love_ an open box like that, especially since DVR’ing HD programs chews up a lot of disk space. And since current cable boxes can’t be legally hacked (even though there’s a USB port built-in), 500GB would be great!

  10. Good point about gaming. Honestly, that’s the major salvo PCs have at this point. Sure, Spore came out on the Mac and that’s a step in the right direction. However, Microsoft has such a big lead in this area and has a strong relationship with hardware vendors (vid cards especially with DirectX integration)

  11. Guys, I think we’re looking at this from the perspective of what we want, rather than what Steve Jobs wants, which for the most part is ease of use. If he’s taking Apple TV away, its replacement is not going to be filled with bells and whistles. It’s certainly not going to have a DVR. How does Apple expect to sell TV shows through iTunes if it’s easy record them on a set-top box?

    No, what’s going to happen here is that Apple TV will go from being a stand-alone box to an iPod dock for televisions. Same features, same nifty interface, but instead of having its own hard drive, it’ll use the iPod. And why not? There are millions of iPods out there and only thousands of Apple TVs. Why introduce a separate device when you can make the iPod/iPhone the center of everything?

    And Jobs will make sure that any iPod/iPhone works with any Apple TV dock. Then he can sell the docks to every hotel chain in the country, and the hotels can charge people $1 or $2 a night to use those docks, because travelers will be much more inclined to do that than blow $5 a PPV movie.

    Games might come later, but for now, this is all about making Apple TV a dock for the iPod. That’s all.

  12. At least two tuners.

    500 GB hard drive.

    Tivo- or Harmony-inspired remote.

    Must *always* be *instantly* responsive to keypresses from the remote.

    Accurate episode listings.

    Do these 5 things at an attractive price (preferably with no subscription fee, or at least a lifetime option) and they have beat every other DVR on the market. Everything else would be gravy.

  13. I have two AppleTVs and love them. I have long thought that the current AppleTV is the Ipod Gen1, maybe Gen2. Give them a couple more iterations and it will take off like the Ipod did. Labeling it as a “hobby” to me was just a move to take pressure off since everything needs to be a home run right out of the gate like the iPhone was. Looking forward to the next Gen AppleTV.

  14. a mac mini running boxee is awesome and it’s what i have in my two family rooms connected to a big screen

    if they could make the mac mini hardware half the price, produce an ipod touch-like remote, and put boxee on it, they’d own the living room for the next 20 years

  15. I bought the AppleTV when it first came out and I’ve been happy with it ever since. Although, I find that I don’t have a lot of time to enjoy using it. I guess that if they come out with some nifty features, then that’d be awesome…as long as I don’t need to buy all new hardware for it.