Is it a box or a TV? Yes…
There’s been much speculation about Steve Jobs’ “I finally cracked it” remark on Apple’s role in the TV industry. I am not following the Apple blogs closely, but the future Apple TV strategy has been a recurring topic on my weekly soaps.
Mainly, the discussion has centered on whether the product will be a new box (as the current Apple TV) or a full-fledged television set? (Consensus: A TV.) And on how the product will get its content? Obviously, it will be hooked in to the iTunes infrastructure, but will it have a cable connection for ordinary TV watching? (Consensus: Probably not.)
The conversations though have missed a few pretty obvious options, and I thought I’d gather my predictions here. If for no other reason that to be wrong on the record.
It will be both a box and a TV: Apple will release both an iTV Mini (essentially a new version of the Apple TV box) and an iTV Cinema, a large and beautifully designed LCD screen with the same hardware built in as the box. Both the Mini and the Cinema will run the same iOS based software, which will account for the entire user experience.
(Relatedly, the PC media will ridicule Apple for shipping the large TV screen without the ability to change and upgrade the hardware box — because the company has chosen not to simply build the Cinema with a replaceable Mini box inside.)
You can connect your cable: How is Apple going to get sufficient content penetration has been the biggest question so far. The strategy might require an AT&T-like partnership with Comcast (or whatever other cable provider is willing to play), but generally the idea is this: You hook up your cable to the Mini or Cinema, you put in your cable card, and you will have access to content based on your cable subscription. Live TV is played directly from cable, and the electronic program guide will look purdy and Apple-like.
Recording is done through iCloud: The magic is in the recording of shows though. Rather than shipping the hardware with hard drives, any piece of content available through the cable package can be recorded to iCloud — and playback in done over IP. Since you’re technically just recording the content available in the cable package, content availability is eliminated as a problem. The content you current get through TiVo will be available on the Apple solution, and you might even be able to record two or three simultaneous shows with a single cable card.
(On the server side, Apple would need to store massive amounts of data; but much less than you’d expect on first glance. De-duplication to the rescue. Apple would be recording everything from a few thousand channels/live feeds, and making this single version available to everyone who’d thought to record the show.)
There will be iTunes and there will be apps: I think this goes without saying, but the iOS SDK is coming to the iTV. And all the standard iTunes content will be there as well.
This strategy seems to solve the pricing problem: Rather than having to choose between an inexpensive product (the Mini) to get market share and an expensive one (the Cinema) to maximize profits, the dual strategy achieves both. The Cinema will be a 5% thing, but it probably would be in either case.
This strategy also seems to solve the content problem: Yes, Apple is still relying on the cable companies (just as they rely on mobile carriers to sell iPhones), but the compromise maximizes content. Over time, the iTV will pop up in more and more homes and cable will become less important while Apple’s negotiating power with content providers increases.
The iTV Mini will be $149 and the iTV Cinema is $2000.
