APPLE TV: GUESS WHAT'S IN THE BOX
Jacob, Phil. The Daily Telegraph
10 Nov 2012: 46.
Full Text
THE TECHNOLOGY GIANT HAS ALREADY REVOLUTIONISED OUR LIVES. NOW IT IS SET TO CHANGE THE VERY CONCEPT OF TELEVISION, WRITES PHIL JACOB
It's not a nice, simple story that Apple is going to come in and turn the world upside down and we'll all live happily ever after We live in a world where you use your iPhone to make calls, check your iPad for the news before going to work and sitting down in front of your iMac.
Still haven't had your fill of Apple yet? Try downloading a song on iTunes before going for a run -- while listening to your iPod.
Over the past 36 years, Apple has dominated and revolutionised our lives like no company in history.
But the tech giant has perhaps its biggest revolution still waiting in the wings -- a complete and radical overhaul of the television industry.
Speculation about an Apple TV has been rife since the publication of Steve Jobs' biography last year.
The Apple co-founder, who died on October 5, 2011, told his biographer Walter Isaacson he had "cracked" the problem of television, although Isaacson did not reveal the plans as the product has not been launched.
Late last year industry sources were quoted as saying that Apple would launch 81cm and 94cm TV sets some time this year.
"Two people briefed on the matter said the technology involved could ultimately be embedded in a television," The Wall Street Journal reported.
"Apple has worked on prototypes for televisions in the past, according to people briefed on the projects."
Apple engineers are believed to have been working since 2005 to reinvent TV viewing. But designing the gadget may prove easy compared with convincing media and cable companies to loosen their grip on the TV industry. This battle is nothing like Apple's previous forays into the music and mobile phone spheres, for which the maker of iPods and iPhones negotiated with weakened record labels and a fractured wireless industry. Now the stakes are even higher and the competition tougher.
Apple is vying with the likes of Google, Microsoft and Amazon.com to make TVs rather than PCs the digital hub of people's lives in an industry analysts project to reach $US200 billion worldwide by 2017. Whoever wins must first strike deals with media companies or cable providers who have little incentive to cede valuable revenue streams.
"It's not a nice, simple, easy story that Apple is going to come in and turn the world upside down and we're all going to live happily ever after," says Craig Moffett, an analyst with American company Sanford C. Bernstein & Co in a note to clients, who has been studying the cable industry for two decades. Moffett also warns any notion Apple could soon unveil its TV system "ignores the business realities that make this such a complicated industry".
In recent negotiations, the main stumbling blocks with cable companies have included a tussle for control over the software that determines the screen interface -- in other words, the look and feel of the viewer's experience.
Apple, based in Cupertino, California, and US cable providers have also diverged on whether a new Apple TV set-top box should be sold directly to customers or leased through cable providers, say people familiar with the talks.
So far, Apple's television effort has been limited to the Apple TV, a small box that streams movies and shows and other content from the web for $A100. But unlike set-top devices from cable providers, it doesn't deliver live broadcasts or record shows.
And unlike negotiations with music companies and book publishers, Jobs was never able to strike a comprehensive media deal to create a product fitting that vision before his death.
Two former Apple managers say he regularly told executives that, unless the company could get more content -- especially live broadcasting -- Apple's impact on television wouldn't be disruptive.
"We continue to pull the string to see where it takes us, and we are not one to keep around projects that we don't believe in and so there are a lot of people here that are believers in Apple
TV," Tim Cook, who took over as Apple's chief executive officer a year ago, said in July.
Successful TV product would add another revenue stream for Apple, which gets more than 70 per cent of its sales from the iPhone and iPad. Were it released this year, an Apple TV costing $US1250 would have generated $US2.5 billion in sales in the December quarter, according to Peter Misek, an analyst with Jefferies & Co. in New York. Apple started talking with US cable and media companies when it was building the first Apple TV, released on the same day as the iPhone in January, 2007. Before the device debuted, talks with Comcast fell apart because the cable company wouldn't let Apple control the entire experience, including sharing data and giving access to all of Comcast's video content, according to a source familiar with the talks.
Cable companies are also concerned about losing their link to customers in the same way Apple overhauled the relationship between wireless carriers and their customers after the iPhone debuted, says Rich Greenfield, an analyst at financial services company BTIG LLC in New York.
People familiar with the talks say Apple is furthest along negotiating with Time Warner Cable. Yet even if Time Warner Cable agrees to a deal with Apple, it wouldn't represent a radical change for customers, who would still pay their monthly cable bill.
But without gaining access to new rights, Apple would end up largely replicating TiVo's business model and relying on customers to buy a device based on how it organises content and combining it with streaming services such as Netflix, rather than unlocking content in one service. Apple would also like to integrate more on-demand content for viewers to watch when they want, including older episodes of TV shows, people familiar with the plans said. For that content, Apple needs to strike deals with media companies such as Time Warner, Viacom and News Corp (parent company of News Limited, owner of The Daily Telegraph).
Cable firms have released applications for the iPhone and iPad to allow customers to watch TV on their mobile devices. There's a reluctance to go further because giving a third party too much control may lessen the value of the bundles of TV, internet and phone services cable companies sell, says Charlie Herrin, Comcast's senior vice-president of product design and development, said in an interview. He declined to comment on Apple.
Jason Hirschhorn, former chief digital officer at MTV and MySpace co-president, says: "If I'm a cable company, do I really want to let Apple into my house?"
Irrespective of when Apple decides to roll out its product, history says it waits four years before radically changing a field.
First, the personal computer and the phone industry in 2007. The iPad followed in 2011. Now the stage is set for 2015 to be the year of the iTV.
----- WHAT APPLE HAS ALREADY CHANGED FOREVER -----
MUSIC The iPod, coupled with iTunes, created a market within itself. Users not only had a music device that played music les, but in order to use it they had to install a store that sold music les for the device. The iTunes Music Store paved the way for music sales to be based on a single 99c song, rather than a $10+ album. Well over 10 billion song purchases later, Apple has become the largest music retailer in the US.
COMPUTERS
Considering Apple's current reputation for portable consumer electronics, it's easy to forget how the company originated. When the idea of a personal computer that came pre-assembled and ready to go came to Steve Wozniak, he began working night and day to make it a reality. Steve Jobs, his long-time friend, discovered a way to turn what was at that point a hobbyist's passion in to a marketable product. Through development of their hardware and a fortunate nd with Xerox, the modern PC was born. Not only was the Macintosh created through this process, but what became the rst version of Windows was as well.
MOBILE
There is no question that the iPhone changed the way smartphones are perceived and designed. They're no longer a businessman's signature status symbol. Now, you see them everywhere, and the ability to communicate seamlessly through data, voice and text has improved dramatically since the iPhone was announced.
Credit: PHIL JACOB