Leaks are starting to appear, in much the same way that Apple iPad was pre-announced, of at least one of Apple’s responses to its failure so far with Apple TV.
There have been two Apple TVs and a third software update, none of which has changed people’s view, that it’s not worth buying just to get internet programming they can already see on their PC. And for almost a year now there has been a strong rumor, one that we feel is absolutely fitting as a next step for Apple, that it would hunt the US Pay TV industry with a combination of a new streaming TV service, combined with all the existing Apple devices out there, but also triggering one or two more specialist devices. A tablet, a set top and a fully fledged TV was the list rumored before the iPad was announced, and now an iPhone styled set top is next on the agenda.
This latest rumor is about a new portable set top from Apple which plugs into your TV and acts as a processor to render the new TV service, which can also run existing App Store applications on your TV. The big news about the leaks is that the device is being prepared for under $100, according to Engadget.
And in the same way that some handset manufacturers (HTC comes to mind) design one phone, and then launch 5 or 6 devices which are minor variations on the theme, Apple is delivering this with its A4 chip inside, as a kind of dumb iPhone 4, disconnected from the cellular network. In other words it’s one of the new iPhones without the cellular chips inside, and with no screen. Connectors are simply power in (and we assume WiFi or Ethernet in) and TV out. It will run the exact same copy of the iPhone OS 4.0.
The coverage so far is talking about content being in the cloud, but let’s be clear on what is meant by this, it means video images streamed over the internet to home from an Apple controlled server, rather than downloaded and stored on the device. It comes as no surprise that the content is rumored to be HD all the way up to 1080p, given that Apple has long used Akamai as a content delivery network and it has been touting its ability to stream HD content for well over a year.
TV for the Apple service is expected to come with some recognized channels, and other channels built by Apple from leading existing TV programs, on either monthly payment programs or pay as you go. Apple could even allow for a certain amount of free programming to trigger device sales.
The announcement is not expected until after the upgrade of the iPhone, which will come at the Apple World Wide Developer’s conference in June, but we wouldn’t put it past Steve Jobs to slip in a ‘one more thing’ at that conference, which is iTunes streaming TV, and then follow up with new devices for the streamed service.
The nice thing about keeping all of the service in the cloud is that this will make it fairly easy to offer TiVo class services ‘ TiVo is famous for offering advanced search across multiple sources of internet video, and using its cloud data to offer audience measurement information for advertising sales, as well as running a searchable metadata database to enable searches of things like actors and directors, in movies or TV programs. If Apple could emulate that, and put it out in a device which costs $99, and as a set of downloadable applications for the iPad, the iPhone, Macs and iTunes on a PC, then overnight it could have several hundred million potential targets for streamed TV delivery and for advertising, opening an immense new front against Google.
The other nice thing about keeping stuff in the cloud, is that the device can be tiny, with hardly any storage at all (the new device will come with 16GB says Engadget), just enough to pause a streamed HD program and perhaps store downloaded Apps. Of course being iPhone sized, this is a highly portable TV experience, take it on the road, on holiday, over to a friend’s house.
The reason that Google rushed Google TV out so rapidly, is that it’s an attempt to spoil the party for the Apple device, and this was possible because it is easy to create purely a device, without negotiating with content holders for video services associated with it.
Apple already has something called a Time Capsule, which is part WiFi router and part 1TB or 2TB home storage server, and this could easily be adapted to store streamed movies, which Apple Pay TV households want to view again and again, just in case they aren’t all convinced about using (and constantly playing for) cloud based content.
The time frame for the long rumored streamed iTunes TV service has always been Summer 2010, for more than a year now, but analysts were split between Apple targeting it entirely at existing devices or whether or not it would use the opportunity to launch into the LCD TV market. Our bet is that it would leave a lag between the introduction of a service and the introduction of TVs built around the service, to ensure that it had taken off at that point. Also content businesses are going to be wary about granting Apple licenses to deliver TV programming solely to Apple devices, for fear of becoming tied in to Apple, in the same way the record labels got themselves tied into iTunes.
So Apple will want to use the launch to attract more and more content to its cause, and then bring out expensive dedicated devices such as TV sets with the streaming TV facility built in, so we’d expect them by Christmas 2010 or even later, perhaps as much as a year down the track, by which time it can have time to negotiate international content rights to take this class of service outside the US.