There’s a lot of speculation out there about Apple releasing an HDTV this year. Marco Arment offered a strong case why Apple will not enter the space, while MG Sielger responded with a well thought out counterpoint. There’s one reason not covered in either analysis: Apple will release an HDTV because it has to. Let me explain.
To date, Apple has over sold two million of its second generation Apple TV (ATV2). Strategically, Apple would like to grow this business. People buy Apple TV today so they have an easy way to watch both iTunes and Netflix as well as enjoy their photos on the best and biggest screen in the house. There’s heavy emphasis on the word easy. There are lots of other ways to perform these activities through blu-ray players or through the embedded software on TVs. However, the user experience is sub-par. To be more precise, setup is sometimes challenging and the user interface is usually clumsy or a little too artsy (i.e. the ice cube in a fish tank interface of last year’s LG blu-ray players).
That will not last forever. More and more TVs today are coming with embedded features such as Netflix clients, photo viewing and music streaming. While they may not be easy to use, they will improve over time. Now, Samsung and LG both have their own TV app stores. It’s only a matter of time before these experiences improve and no one feels the need to purchase external boxes such as Apple TV and Roku.
Marco Arment stated that complexity was the barrier to Apple’s entry:
“A bigger problem is that Apple prefers to offer fully integrated products, but a modern TV is just one component in a mess of electronics and service providers, most of which suck. Apple doesn’t want their beautiful, it-just-works TV to need to interact with Onkyo’s 7.1 HDMI-switching receiver, Sony’s 3D Blu-ray player, Microsoft’s game system, Comcast’s awful Scientific Atlanta HD DVR, Canon’s newest camcorder, the photos on your point-and-shoot’s SDHC card, and your Logitech universal remote. (The need for TVs to have a more complex remote than the Apple TV might be fatal alone.)”
But what Apple will release will not be a literal TV just like the iPhone wasn’t just a phone. Oh sure, Apple called it an iPhone so everyone would understand it. The Apple HDTV will be much more than a TV. Of course, it will have a spectacular screen that will rival anything else on the market.
To speculate for a moment, it will go well beyond being an HDTV with an embedded Apple TV inside. The Apple HDTV will shy away from integrating with the rest of your home theater components and electronics devices unless it does it simply via HDMI or Apple technologies such as Airplay (keep it simple). Imagine a device that removes the need for all other components in your home theater system. No more receiver, no set-top box and maybe even no speakers. The device will encompass all of these functions. Most importantly, there will be no wires. For some reason, the rat’s nest of wires upsets a lot of folks. The complexity cited by Marco will not exist, as this will be an all-in-one unit. I wouldn’t be surprised if the current Apple TV remote suffices.
Apple worked on the iPad for years before it came out. Several times Steve Jobs killed the project when he didn’t like the end result. The mess of components and integration challenges will be solved. There will be technologies introduced that are game-changers that you and I haven’t thought of yet (i.e. gesture based controls on the iPhone seem so intuitive now).
Its Wife Acceptance Factor (WAF) will be high because of its styling and its ease of use. As a one piece unit, it will not overwhelm the room. Think Bose but with more functionality and value for the price.
What will the actual specs be? Will it be a 4K display? No. Will it even be 1080P? Maybe. Will it have discrete 7.1 surround sound? Don’t know. The end result will be an awesome experience for the consumer and most folks won’t fixate around specs if it’s successful.
In MG Siegler’s post, he speculates it will have a DVR. I don’t think so; DVRs will add to much complexity. It will simply talk to the cloud and you will be able to buy and store your content there, nice and easy. Hopefully there will be some thing similar to Netflix’s all-you-can-view streaming (or just keep using Netflix). With no threat of Apple domination given Netflix’s large subscriber base, how could the studios say no to all of Apple’s cash (in addition to the cash they already get from Netflix)?
In conclusion, Apple must protect and grow its iTunes ecosystem; iTunes and iDevices reinforce each others sales. To grow, Apple needs to expand further into the TV space. While most see Microsoft and Google as Apple’s most obvious competitors; Samsung, LG and Panasonic may soon be in the mix.