Why Apple Didn’t Introduce an Apple TV App Store

June 14, 2012

An app store for Apple TV? Apple TV APIs available for any developer to create apps? It was the biggest rumor that didn’t come to pass at this week’s Apple World Wide Developer Conference (WWDC). Despite this, there was still a fairly impressive list of announcements: iOS 6 with a virtual wallet app (Passbook), Apple maps with turn-by-turn driving directions, a new Retina Display MacBook Pro (yes, I want one) and an OS X  Mountain Lion upgrade for only $19.99. So, where was the API for Apple TV?

GigaOm posted its analysis of why Apple took a pass. Their premise was that compared to Apple’s other product lines, Apple TV has a small install base. In another words, it’s too small of an opportunity for both Apple and its development community.

However, there have been over four million second and third generation Apple TVs sold to date. While the relative opportunity is small today, the potential opportunity is huge. In the stand-alone streaming player market, Apple is the market leader with the Roku trailing in second place. Perhaps Apple feels there’s not enough competition yet and it doesn’t need to make a move until it’s truly ready. Some folks thought Apple would never get in the phone business because of the small margins.

In my opinion, the primary reason for not launching an Apple TV app store yet is driven by marketing not technology. Apple does not want to steal any of the thunder from its yet-to-be-announced Apple HDTV. When you combine the total market space of streaming boxes and HDTVs, it’s truly enormous. Exhibit A that Apple is holding back was March’s Apple TV refresh. The third generation Apple TV was only an incremental upgrade. Its primary improvements were the bump in resolution from 720P to 1080P and a faster processor. One of the drivers for this was to keep up with the other upgrades in Apple’s ecosystem such as the iPad Retina display and AirPlay streaming in Mountain Lion. There was speculation that it would have Siri-like voice commands but besides a UI overhaul there was little else in new functionality.

Furthermore, the TV app stores that are out there now are disappointing. Outside streaming apps such as Netflix and VUDU, there are no real blockbuster apps in TV app stores. When was the last time you paid for an app in the Samsung or LG app stores? While the smart phone had apps like email, Twitter and Angry Birds, there’s been nothing as compelling in TV app stores.

I don’t think the lack of blockbuster app is due to a lack of imagination. Besides market fragmentation, one of the challenges has been the poor user experience. The HDTVs announced at CES came with an overwhelming number of control options. One living room device bucking the trend is the Xbox. With its Kinect motion and voice controls combined with its content deals, Microsoft is creating a compelling offering. However, Apple may not view the Xbox as competition as Tim Cook has stated he is not interested in the console business.

In it’s current incarnation, the current Apple TV doesn’t lend itself to lots of third party apps given the limited options to control it (though the iPhone remote is pretty handy). Given how Apple values the user experience, they have preferred to limit the apps on the box to a limited number of partners. I wouldn’t be surprised if we see HBO GO added to the current Apple TV.

For a TV app store to be successful, it needs to provide an awesome user experience and great content. As a product focused company, I’m sure Apple can create an amazing HDTV. The real question is can they cut the needed content deals to make it insanely great.

Where is the Apple TV App Store? Not here, this is a Thunderbolt Display

Where is the Apple TV App Store? Not here, this is a Thunderbolt Display


Tags: Apple, apple hdtv, Apple TV, HDTV, Xbox

8 Responses to Why Apple Didn’t Introduce an Apple TV App Store

  1. Ben Drawbaugh on June 15, 2012 at 8:18 am

    Nice analyse, but I think you missed one big point. You rightly pointed out that the Xbox was leading the way but didn’t mention that it doesn’t have an App Store and public API either. You don’t need an app store to have great content, and a set-top box is all about delivering content.

    Apple didn’t release an app store, because they won’t work on the TV space — as you pretty much surmised above mentioning LG and Samsung’s. Sure it would help a few startups, but the big players and there content can be delivered via partnerships.

    All that said, personally, I think there is another reason. I think that Apple knows that everyone is currently doing it wrong and that switching Apps to find something to watch is just as jarring as switching inputs — something most people don’t do. The Apple TV has been a stop-gap to extend the iTunes ecosystem to the living room and I think it remains just that, with a few extras, until Apple figures out a way to work a deal with the content creators. But I believe we have to wait for the studios to realize that UV, Xbox, etc are not the answer before that is going to happen.

  2. DaveZ on June 15, 2012 at 12:31 pm

    They will…

    • TechWzrd on June 15, 2012 at 4:41 pm

      Agree. They must play the game with Microsoft having how many Xbox 360′s in the home? Its still unclear to me how they will be able to get the margins necessary to make this a winning proposition for Apple shareholders. We know Roku is losing millions, TiVo is losing millions and if it wasn’t for litigation earnings they would be out of business. Google has deep pockets and so does Apple so they certainly will be a player but I never see them dominating the videoscape like they do in tablets and phones.

      • Dave on June 15, 2012 at 9:17 pm

        They’ll make money when they open the aTV App Store and offer some Bluetooth accessories. Then they’ll take a 30% cut of every game, or whatever, sold.

      • Gabe Gagliano on June 15, 2012 at 10:54 pm

        There’s talk of doing a subsidy model similar to how the iPhone works with carriers. As much as Apple loves app sales, they are focused on selling products. Wouldn”t be surprised if we saw a three year cable commitment bundled with a lower cost Apple HDTV.

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