Blog Post

Apple’s TV plans: my takeaways from the WSJ report

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

On Sunday the Wall Street Journal published a report on Apple’s (s aapl) television plans. I had to read the story at least three times to really figure out what exactly Apple is doing when it comes to television. Here are my takeaways from the report:

  •  Apple is working on its own TV, and it will use wireless streaming to get content. It will use Airplay, a wireless streaming technology developed by Apple.
  • Apple has worked on integrating DVR and iCloud.
  • Apple’s senior VP Eddy Cue is meeting with media companies.
  • Cue is talking about various technologies that would allow users to pick up streams of video on different devices. Actually that is par for the course: Hulu, Netflix and Amazon already do this.
  • Apple will use voice commands and hand gestures to control Apple TV and look for content. Well, it did launch Siri on iPhone 4S, and it makes the most sense that Apple would move Siri into other devices including television, which is not quite conducive to QWERTY-style keyboards. The New York Times had provided hints of this Siri-based television interface in a report published in Oct. 2011.
  • Apple is not saying what devices or what specific software it is building on, and it is not clear what it wants from the media companies. Hello! Should we be surprised that Apple is being Apple?

AppleTVMy interpretation of the WSJ story is that Apple is continuing to work on its hobby project, making progress, and it is integrating all sorts of technologies. Apple clearly has to do something or Google (s GOOG) will run away with the Internet TV business. As Janko Roettgers pointed out earlier, Google TV has little or no competition when it comes to next-generation TV-oriented operating systems. Someday in the future there will be a new device from Apple that manages to overcome the shortcomings of the current television ecosystem.

The streaming set-top-box market will reach about 12 million in 2011, and Apple will have about a third of that market with 4 million devices, according to the research firm Strategy Analytics.

My own personal bet is that Apple will come up with a newer, even smaller version of its Apple TV with higher-end graphics, more processing oomph and the ability to seamlessly detect all Airplay-enabled devices on a Wi-Fi network.

32 Responses to “Apple’s TV plans: my takeaways from the WSJ report”

  1. HMS Titanic

    “Eddie Cue is talking with media companies.”

    Well, good luck with that. Because Silicon Valley still doesn’t apparently understand why people watch television, and no magic set top box or any other gadget matters one tenth as much as the content. So, Eddie should probably rethink its strategy here, because unless he has content sewed up, nothin’s gonna happen.

  2. All depends on the business model Apple comes up with. The Business model of charging on download is not going to work well with Living room (TV) & hence cable is still in place. It would be nice to see them giving a bundle like the cable players & not the sort they do with Apple TV today.

  3. While I think that Microsoft is in a very good position with their XBox console helping with traditional in so many homes, Apple has the leverage of the devices that address the unmet needs related to taking your content with you.

    • Apple charges too much and the carriers networks will never be dominated by Apple. Do you think cable providers are going to kick back and let Google or Apple get free rides while the cable providers stock tanks?

      Apple and Google already missed the bus on this game. Microsoft setup global alliances with all the providers, which is Microsoft’s sweet spot for business.

      Apple’s and Google business models are all about themselves, and they don’t traditionally partner as a part of their core business. TV requires a large food chain of partners, and this is where Microsoft has excelled.

      Good luck to the contenders, I hope Apple and Google do come out with hot technologies, because Microsoft needs to be kept on its toes in this game.

  4. Abbi Vakil

    IF Apple were to start selling actual TV sets, I would be worried because it would mean they are chasing revenue growth. They have nothing to contribute towards the hardware of a TV but can vastly improve user experience by attaching a box to your TV- all the same benefits of an Apple branded TV w/o needing to buy a TV. I predict the business model will be similar to iPhone or iPad- buy hardware for $199 & add a monthly data plan where data equals TV channels you can view any time. Press 1 button to switch to Live Mode so you can watch sporting events or news. Simple, upgradeable & easy to support.

  5. Google TV is the same as Microsoft’s early tablets, some features everybody thinks have to be there. But no iPad, no passion, just an expensive feature set.
    Emotions make a game changing product, not feature sets.

  6. Xbox as the trojan horse is definitely interesting, but from an Apple perspective an Apple TV ‘hub’ with more grunt and more local storage for DVR / time-shifting capabilities seems to make more sense than an actual TV set (although it’s not hard to imagine a real Apple Television – commercial realities aside).

    Siri, Airplay and better controller apps for any of your iDevices would complete the set. Actually, all the technical ingredients are there (minus the TV network agreements), they’re just not yet seamless enough.

    Can they, for example, find a way to consolidate what right now are a ton of individual TV network apps into something that’s controlled via a central interface, including on-demand TV (OTA-esque. Think your digital TV guide on steroids. Voice controlled of course)? I guess that’s part of what they’re negotiating.

    All of that would have to include overlays for ‘social TV’ (program related Twitter feeds etc).

    Sorry .. I seem to have turned into Steve Gilmor. Better stop ‘imagining’ :-)

      • Yes, exactly. AppleTV doesn’t need local storage to be a DVR. And I think people underestimate how cool it is to share photos and videos with a room of people streaming their favorites from their iPhones onto an AppleTV. The iPod didn’t win based on the hardware, but rather on the hardware, software, and infrastructure (iTunes, etc). With the infrastructure that Apple’s created for iCloud, plus connectivity with iPhones, iPads, etc, Apple has a strong hand even in comparison to Microsoft. (XBOX has a huge installed base, but it doesn’t really have the upstream or downstream infrastructure that Apple has.

  7. Sebastien Le Calvez

    I can’t help but to say your love for Apple blinded you here. You’ve said numerous times you don’t think much of Microsoft but if you are a wise man, you should take a look at them twice. Xbox Live has the content, the market penetration and the innovation Apple or Google would die for.

    • Steve Klein

      I don’t even play video games and I consider Xbox a must have at this point. I have an Apple TV as well but would probably skip it next time around. The new Xbox dashboard is so close to there that I would be shocked if Apple got closer.

  8. Travis Henning

    Apple should not build their own TV for a couple of reasons:
    1. The upgrade cycle on TVs are too long. For Apple to sustain its hardware model users need to upgrade every 2-3 years. People don’t buy new TVs every 2-3 years, more like 6-8+. Apple makes most of their profit on hardware which brings me to my next point.
    2. If they develop their own TV, it may cost 2x-3x of a “normal” TV in order to maintain their margins and account for the longer upgrade cycles. They blew away everyone with their iPad pricing and could surprise us with reasonably priced TVs, but I just don’t see them being able to do it since users won’t upgrade TVs like they do iPads

    In my opinion, let others make the display devices. Use the Apple TV set top box as the brains and the TV as the monitor. Build the simple interface (that doesn’t require a keyboard) and connect it to any TV the user wants.

    • Yeah. The TV industry tried a short upgrade cycle wanting everyone to move to 3d last year. See how that went, right?

      The only advantage Apple releasing a TV as part of the solution is actually the typical ideology going back to the original iMac—3 steps, take out of box, plug into wall, no step 3.

      But most people have already gotten used to the idea,–as confusing as it still can be–of an external device.

      The XBox problem is branding. Gamers will get a TV. But non-gamers don’t want a game machine. Giving MS the benefit of the doubt and assuming the 58 mill mentioned earlier is one per household, that is still less than 50% household penetration. The other households either don’t want an MS game machine or don;t want a game machine to begin with, much less one to use for a TV.

      The killer TV device is going to have to be for TV from the get go, probably without any indication of what is internet or network TV, just TV shows and movies. Ultimately the consumer doesn’t care if it is from a network, cable company, or internet. They just want their show.


    • StephenJohn Menendez

      Yea, that’s a Microsoft won’t see this author say anything about them in a positive light… He has to talk up Apple to justify the payment from them for such a prominent link in the navigation bar…
      Just saying.

    • For sure. I think their deal with Verizon was a good example of a winning approach, now they need to make it happen at scale and make XBox cheaper. I also think Kinect and X-Box are good combination and will keep Microsoft in the game, though frankly with Microsoft these days it is hard to figure out what is really going on in their mind. What are your thoughts Paul?

      • Jason Tadros

        Are you kidding me about scale? Apple TV and Google TV aren’t even playing the same game in the living room. There are 58 Million Xboxes installed right this minute, and 1.5+ million being sold a month. Xbox has had a deal with U-verse for years now, and now Verizon, who’s left Comcast (already announced) and Time warner?? Even if Apple could turn every iPhone into a set-top they still couldn’t catch that momentum. Microsoft already powers U-verse and now comcast’s back-end with Mediaroom, how exactly does apple cut out the cable companies to reach your supposed scale? Last but not least, do you really think air play is the future of tv? You don’t think intel or other chipsets using already deployed standards like widi or DLNA couldn’t already do the same thing?

  9. John R. Kirk

    “Google TV has little or no competition when it comes to next generation TV-oriented operating system.”

    Well, that’s true if by that you mean that not one else has been able to make a TV operating system that is anywhere near as bad as Google TV. I doubt that Google TV is the only threat to Apple’s TV plans, but it it were, then Apple could sit back and take its sweet time because the only one Google TV is threatening is its own manufacturers.

    • John

      Lol! Agreed, Today, Google’s TV OS is not that great. However, there is no one else doing anything like that so they have a time advantage. I think Microsoft could do some interesting things, but as Paul suggests, it centers around X-Box.

  10. Michael Long

    “Apple clearly has to do something or let Google runaway with the Internet TV business.”

    Google runaway with the business? As in the Logitech Google TV-based Revue set-top box?

    “Logitech told investors at its analyst day earlier this week that it is running down inventory of its Google TV-based Revue set-top box, and that the company has no plans to replace it with a new model, according to the gadget site The Verge.”

    “CEO Guerrino De Luca said that the company made a mistake in believing the device would be revolutionary. He said that with the Revnue the company “executed a full scale launch with a beta product and it cost us dearly.””

    • Michael

      I am going on the assumption that Google will get better with its offering. They have done improvements with Android on phones and tablets and they will continue to make progress on the TV OS. I do think someone is going to build an OS for TV-devices. The question is who. For now there is only Google actually trying to make a go of it.

      I think Logitech CEO’s comments clearly show that they bet on an incomplete OS and paid the price. I think it is as much on Logitech as on Google. Don’t you think?