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AVS › AVS Articles › Can Apple Truly Revolutionize the TV Industry With iTV? AVS Responds

Can Apple Truly Revolutionize the TV Industry With iTV? AVS Responds

By Sam Kennedy, 5/27/12

One of the hottest bits of speculation in the tech industry currently centers on Apple's rumored entrance into the TV market, expanding on its Apple TV product into full-fledged HD displays. A simple Google news search demonstrates that theories are at a fever pitch, with Apple Insider recently stating that at this point it's a "matter of when, not if." Others claim that prototypes are already being produced in China and iTV, or iPanel, (two possible names) could be announced as soon as next week, at the WWDC 2012 conference in San Francisco.

Next week is likely too soon for a reveal (Gene Munster, an analyst at Piper Jaffray, says he believes Apple's iTV sets won't hit until late 2012 or 2013 at the earliest), but at this point, it seems pretty safe to assume Apple has something cooking. Munster claims that Apple's LCD TVs will retail between $1,500 and $2,000, with screen sizes between 42 and 55 inches. "Steve Jobs was the master at 'just one more thing,’” he told ABC News, "and this was his last one thing."

In his final days, Steve Jobs told biographer Walter Isaacson that he wanted to create a revolutionary, user-friendly, integrated TV -- presumably hinting at an Apple-sleek, Siri-enabled set with an app store that would make finding content and browsing easier than ever. "It will have the simplest user interface you could imagine. I finally cracked it."

(Not Apple's iTV -- but some speculate it could look like this concept from Loewe)

Clearly Jobs felt like he had a vision that could change TV. And, it appears Apple is now acting on that vision. But could an Apple LCD really challenge a market with such deeply entrenched and powerful players like Sony and Samsung? Could Apple revolutionize -- and potentially dominate -- TV just as it has done with computers, mobile phones, and music? "Anyone who manufactures a high-end TV will get hammered," Munster warned ABC News.

We raised the question to the experts in the AVS community and, unsurprisingly, there were mixed opinions on the subject. While many felt like the TV market was ripe for a Apple-driven shakeup, not everyone was convinced that Apple's approach of making things simpler and elegant would be enough to truly challenge the industry. But the community raised several fascinating theories, painting an interesting picture of what could be the future not only for Apple's iTV, but the TV market as a whole.

The Display

"I'll give Apple all the credit in the world, because Apple opened my eyes to the jaw-droppingly massive difference in LCD display technology," said member Mark the Red. "If Apple didn't exist, we'd all still be looking at ghetto-ass hideous Twisted Nematic panels on every laptop, work computer, or monitor in the world." He continued, "Apple has always been, and always will be, a mighty and fearless champion of awesome LCD display technology… That gives them instant credibility in the HDTV world in my book." Mr. Wally theorized that Apple should lead with a 4K display, which quadruples the resolution of 1080p, just as the company pushed the mobile market forward with the iPhone 4's Retina Display. "That will get people interested as a cheaper alternative to OLED," he said. JohnAV argued that just a nice looking screen won't cut it, though: "Not if it is nothing more than a large iPad, only this time an HDTV. Apple historically has done nothing that is really beneficial to the AV marketplace. Remember Steve Jobs and the Apple iPod Hi-Fi, where he declared that it was just a good as a home stereo?"

The Interface

“Apple is excellent about meeting the needs of the layperson," said fatuglyguy. "If they can, which they usually do, then I think they'll be successful. The 'Smart' interfaces built into the majority of HDTVs are disjointed, sluggish, and confusing at best. To eschew even dealing with them, I have two Apple TVs myself." MrBobb agreed, pointing out that Apple could influence the rest of the market in this respect: "Lots of Apple haters say they'll never buy an Apple product -- it doesn't have a keyboard, it's too small, doesn't do Flash, blah-blah-blah. I ask you, if the iPhone never existed, does anyone think we would have a cool gesture interface? Would we have thousands of apps? Would we have super scratch-resistant gorilla glass?" 320

Zrockstar added that it will certainly be all about the new functions made possible through apps. "No one thought the iPhone was too revolutionary until they realized what app developers could create and do with the device," he said. "With apps and iOS, the possibilities of what your TV can become and do are endless! Gaming, video, music, computing, etc. And with Siri, even better. 'Siri, record all the Seinfeld episodes and any soccer game that comes on this weekend.' Oh yeah, and your DVR is in Apple's iCloud, so you can watch anything recorded on any device. That, my friends, is revolutionary."

In addition to connectivity with Apple's slate of existing devices (imagine controlling your TV with your iPhone or iPad, or sharing content back and fourth), jlb500 added that an iTV could also integrate some of Apple's other successful features. "FaceTime on the iPanel? Take a family photo standing in front of the iPanel on your living room wall? Call your iPanel from your iPhone? I can already imagine the marketing of these features."

That said, for the high-end user, Apple's interface and aesthetics could potentially be limiting. "Apple's approach to Zen design frequently means taking choices away from the user," pointed out zoetmb. "So I would imagine that an Apple TV would have few ports and it would have minimal controls. My bet is that you won't be able to calibrate an Apple TV." Sipester agreed, saying that, "compared to the TV/Home Entertainment area, the iPhone and iPad are child's play, since there is just one device with minimal peripherals (other than, say, headphones and a case). The TV/Home Entertainment area is so much more complex, and that's why it's taken so long for them to figure this out. If they come out too soon, it'll just be another boondoogle like the Google TV box."

The Content

Content is where AVS members think Apple has a real chance of shaking up the industry -- but it won't happen overnight. "According to Issacson's book, to him ‘cracked it’ means a new, easy to use interface," explained MrBobb. "As we all know, the complicated, currently-available clicker interface is contrary to Apple's ethos. To me, though, the other half of the key is content. Before iTunes, remember that the music content providers were afraid of distributing their content digitally. Steve Jobs, with his mercurial personality convinced them to go along. This is the other half -- Apple has to convince the video providers to play the game. And if any company has the cache, it's certainly Apple." [Irishman] agreed, saying that, "like when iTunes came along, it took a lot of kicking and screaming to convince the labels to go along with the idea of offering their catalog for download through iTunes (and even more to break up albums and sell individual tracks)! If Apple really has cracked the code on making a game-changing HDTV, it will have to live or die on content deals." 320

Jlb500 thinks this is absolutely where Apple is headed. "Apple's main target won't be competing manufacturers of consumer TVs. Instead, Apple is looking to revolutionize the way people receive their content. They want to drive current providers of satellite/cable TV into the dark ages. By targeting the content providers, they will subsequently erode the TV hardware market. That part will take care of itself just as we are seeing with the mobile phone and tablet markets."

The timing seems right for this sort of shakeup, as consumer demand forces content producers and distributors to rethink their models. See headlines like "How Game of Thrones Pirates Could End a Golden Age of TV" and it's clear that we're headed into a new era where content needs to be available on demand and a la carte. "I think giving people the ability to buy or rent their content a la carte or through a subscription (like Netflix) will be what makes any Apple-branded TV a success," said [Irishman]. "I can cut the cord, yet still be able to get, for example, an HBO Go app for $8 a month for the same stuff I have to pay DirecTV over $100 a month." jlb500 added, "Think about what Apple could do with the NFL. An Apple version of the 'Sunday Ticket.' All the games...swap a game from your iPad/iPhone to your iPanel.'"

This may certainly be the goal, but getting there clearly won't be easy. "Apple is great at creating ecosystems to support their products," explained zoetmb. "The problem in the case of television is that there are tremendous dependencies that Apple can't control. So Apple either has to make a deal with every cable/satellite multi system operator so they can replace their box or they have to make a deal with every content company (the cable networks) so they can eliminate the cable companies and move towards 'I can stream any show from any channel whenever I want it' and away from appointment television. In spite of the fact that Apple is now one of the largest companies in the world, I don't think they can accomplish either. In the end, the current Apple TV box has very little content. Even though Steve Jobs is quoted as saying, 'I've cracked it', he's also quoted as saying that it's impossible to deal with the set top box issue because there are so many cable companies."

Sytech agreed, saying that "Apple will not be able to push around the TV and movie studios like the music industry. The music industry got caught lagging in the transition to digital download as internet speeds increased. Battling heavy piracy and falling physical media sales, they were easy targets. Apple offered easy simple distribution with protection of content and eventually all of them got on board. With TV and movie studios, the pockets are much deeper -- they already have multiple distribution avenues and internet speeds are still not quite there to replace their 720p or 1080p source material. They do not want Apple controlling the price of their content, even if they give up the short term profit increase it would generate."

But beyond the issues with sourcing content, delivery could be a challenge for Apple too. "Assuming they could work out the content deals with all the providers, the main issue is bandwidth for an IPTV type service," explained Sipester. "With Cable or Satellite, I can have multiple HD streams in the home without impacting my internet service. Good luck trying to get 3-4 HD streams plus normal internet use with any current provider in the U.S. Even without the 250 or 300G limit monthly cap, there just isn't the bandwidth available to do IPTV nationally (or even globally in most locations) in a way that can compare to Satellite/Cable TV."

The Prognosis

Clearly there's a market opportunity for Apple here, and the company can leverage its momentum in other categories to potentially make a big splash -- but success is far from guaranteed. One issue that zoetmb points out is that Apple typically deals in high-margin products, which won't be the case here. "TV is a low margin product," he said. "Most TV manufacturers, including Sony and Panasonic, are in deep trouble. Sony might get out of the TV business entirely, and if they don't, most of the line will probably be made and designed by others, except for the badge. So then the question becomes, 'how can Apple make an Apple TV a high-margin product without having to price it so high that it becomes only a niche product?'" If Apple can hit the right price points, however, rogo thinks they'll be just fine. "If Apple goes out at $2000 for a 55-inch, it's in the sweet spot of the 'performance segment' of the market. In other words, it's Apple territory. Will they dominate? No time soon. Will they sell millions of them? Magic 8 Ball says: Signs point to yes." He continued, "It won't have typical Apple margins, but it would be perhaps the first product where a significant chunk of the revenue is expected over time -- think video rentals and sales -- and that's interesting."320

One thing Apple does better than any other company in the world, however, is building consumer excitement and in making its products desirable through creative marketing. Mark the Red sees this as being the opportunity here as well. "Just think, every Starbucks, every new-age store, spa, or nightclub in the world will be lining up to get one on release day to show how trendy their place is. 'OMG my TV can play angry birds!!?!? Take my wallet. I'll pay anything!' If I was Samsung, Panasonic, Sharp, etc. I'd be crapping bricks." It's that Apple cool factor that can't be underestimated for sure. "There are so many iPads and iPhones out there," added mohanman. "I can only see success out of this. I read a magazine article almost 10 years ago on what Apple wanted in the future. Everything from that single article has come true so far, including iPhone, and iPad… and now the TV, which this article also mentioned. It will change everything."

Still, no matter how cool it looks, how elegant it works, or how much it forces change for content distributors, there will be those who just can't get past the notion of an Apple product sitting at the heart of the living room, or better yet, home theater. "I own numerous iPads, my wife is on her fourth generation iPhone, and we have Apple TVs in our home, but there will be a lot of inertia (and AV snobbery) to abandon a 64" Plasma for a 55" LED with a popular logo on it," said winston9332. Many AVS members just can't fathom Apple presenting a serious challenge the existing players.

"Funny, I remember people making exactly the same remark about the mobile phone industry before the iPhone shipped," said ecrabb.

"Exactly," added javry, "and the music industry before that. Not bad for a 'computer company.’”

What do you think? Does Apple really have a shot at disrupting the TV market? Chime in on the comments!

Comments (8)

I'd buy one in a New York minute
So you buy an overpriced TV that can connect to a series of other overpriced products. Just what I need...
I'm hoping for quad and OLED
I made a few predictions myself of what the Apple iTV features could be like and how it could be a serious contender as a living room video game "console" http://mithunonthe.net/2012/04/03/state-of-gaming-itv-apple-television/

It may sound like hogwash, but I seriously believe Apple will do it.
MovieSwede; its all relative but will go nicely with all the other "overpriced" things I own like my 2011 Acura (I could drive a Prius) and to what overpriced products do you think I will hook it too? My SC-55? I could have an all in one. I prefer Apple over PC for many reasons but at the end of the day I can afford them so........................................ please purchase what you like and have a nice day.
I suppose when its competing with other TV's on the markey, they'll need to really consider cosmetics. Frameless, seethrough so it blends in with the environment, are a must in my opinion.
jeff, its your money you can invest them how you please. Its just that I like options. I dont want to be forced to by product B from the same company that sold me A. Just because product A doesnt work with other companys products.

The concept of recording something and then play on your mobile hardware sounds nice, but I want to decide each platform myself.
No doubt in my mind that Apple will rock the world when they release their first Apple TV Monitor. The current Apple TV already blows away our customers. Both parents and children's faces light up equally when all of the sudden they are playing Angry Birds through the Apple TV on one of our 120" 1080p projection displays - In a word - AWESOME! Parents are lost in the wonder of "How'd he do that?", while the kids just KNOW its cool!!!
No Apple won't steer their customers wrong with this product and I'm sure if they don't dominate the market with it, they will at least dominate the high end consumer level market..
AVS › AVS Articles › Can Apple Truly Revolutionize the TV Industry With iTV? AVS Responds