Tuning in to Apple TV 3.0
Does Steve Jobs have a surprise in store for the analysts and reporters gathering in San Francisco for Let’s Rock — the dog-and-pony show Tuesday at which Apple (AAPL) is widely expected to unveil the next generation of iPods?
Peter S. Magnusson hopes he does — and what he’s wishing for is a new Apple TV.
The Swedish-born entrepreneur (and founder of Virtutech) points out in a thoughtful post that the upcoming holiday buying season is a perfect opportunity for Apple to overhaul the set-top box that even Jobs admits has been less than a runaway hit — and Tuesday would be a perfect opportunity to unveil the new device.
Why now?
Because on Feb. 17, 2009, by Congressional mandate, all full-power analog TV broadcasts in the United States will cease. That means that not long after Christmas, tens of millions of American TVs will go dark unless they are connected to cable, satellite or an analog-to-digital converter box.
The U.S. government is offering every household two $40 credit card-type coupons to pay for these boxes and has set aside enough money to fund more than 22 million of them — with an option to increase that number to more than 33 million.* See here.
This is expected to create a huge market for converter boxes, most of which will do no more than bring that dead TV back to life and offer a new remote to replace the one that no longer works.
But it could also create a huge opportunity for Apple TV to stage a fresh assault on the living room — especially if Apple throws in a few more goodies that Magnusson spelled out in a wish list posted on Sunday:
- Blu-ray disc player; of course one that can also play DVDs and CDs.
- ATSC tuner. That’s a fancy way of saying over-the-air digital TV.
- 500G hard drive (1T optional).
- WiFi.
- DVR capability added to iTunes 8.0.
- Time Capsule functionality, in other words, Time Machine backup.
- Full Safari browser and support for (optional) keyboard.
- Various new and improved options for Internet video.
- Support for using the iPhone or the iPod touch as smart remotes. (link)
Magnusson wouldn’t mind if the new box played games, but that’s not a deal breaker. He also suggests that it would be nice if Apple’s re-fashioned set-top box were seemlessly integrated with the iPhone, which would enable what he calls the “coolest thing of all”:
“If I’m watching a movie with the sound turned way up, it would gently pause when my cell phone rings.” (link)
Now that’s a feature I can imagine Steve Jobs showing off on stage on Tuesday — and having a lot of fun doing it.
The timing is certainly right. The DTV era began at noon on Monday in Wilmington, NC, when all the major networks except the local PBS afiliate turned off their analog broadcasts in a trial run before the nationwide shutoff.
The original Apple TV was announced two years ago and started shipping in March 2007. The device got a major overhaul in January 2008 with the release of a software update that Apple dubbed “Take 2.”
*UPDATE: Reader Jaime in Denver points out that that in all likelyhood, the $40 credit could not be applied to Apple TV for a variety of reasons, including the interfaces it supports. See Rule d. 54. here.
Apple will never add Blue-Ray Drive to AppleTV. Apple wants you to buy your movies in iTunes.
@ Justin, St. Paul, MN stated “ATV should be able to download my podcasts automatically since it’s online all the time.” No need to download, Justin because podcasts are immediately available on demand on Apple TV via streaming.
@ Mother, Germantown, MD wrote: “It seems odd to think that people who are currently watching TV over the air, a clearly low tech approach…”
Anything but, Mother: The quality of over-the-air HDTV clearly exceeds that of satellite or cable signals. Get that antenna back up!
@ Emmy, Germantown, TN wrote: “I don’t have much use for the AppleTV as it currently stands.” Do you rent movies? Do you take digital pictures? Do you ever watch YouTube videos or video podcasts? Have you ever missed an episode of a favorite TV show? If so, you have more use for Apple TV than you realize…
@Alex NY NY: You wrote that “[ independent and foreign films ] is where netflix is still hard to beat and more convenient.” Hard to beat the variety, perhaps but nothing is more convenient than movie rentals via Apple TV. If you have a broadband connection even HD movies (with true multi-channel audio) are viewable just a few minutes after pressing “OK”.
You also stated that “if you ‘rent’ a movie trough iTunes, you need of watching within a short time lap before it expire.” Not true–you have up to 30 days to begin watching the rental. Once you start, you have 24 hours (or 48 hours in Canada and the UK) to finish watching it. If you simply pause the movie, you can resume watching it at any time, even months later.
Finally, you mentioned that, “with net flix you can get 3 blue ray movies at the time for 13.99.” HD rentals from Apple TV are $4.99, just 33 cents more than the Netflix offer you mentioned and you don’t have to rent multiple movies to get that price.
I am a huge Apple fan, and I own an Apple TV 2. I enjoy the high quality video output, the fact that I was able to rip all of my DVD collection to Apple TV (albeit using Handbrake and not an Apple product), etc. However, I would argue that Apple TV will not be practical for most consumers until it provides the following features out-of-box, with no hacking required:
1) ATV should be able to download my podcasts automatically since it’s online all the time
2) ATV needs a bigger hard drive (500gb or 1tb) so it can store more movie files and perhaps also function as a backup device like Time Capsule
3) ATV needs to support more file formats
4) I do NOT believe ATV needs to include a DVD or Blu-ray player because for most of us who buy a shiny, expensive tech toy like ATV, physical media was dead a long time ago
5) Most importantly, Apple NEEDS to include an IPTV application like Joost out of the box. Some may argue that offering free content on the ATV will cause Apple to lose money from iTunes sales. I strongly disagree. I would argue that with the inclusion of a free IPTV service like Joost, sales of the ATV hardware itself will increase dramatically and offset any losses from iTunes. Since applications like Joost offer on-demand (but limited) TV programming, users would still turn to iTunes to purchase music, rent/buy movies, and perhaps still rent their favorite shows. I have already hacked my ATV and have Joost running on it, and consequently I was able to get rid of my cable TV subscription. I watch programs on Joost a lot of the time, but also rent movies through iTunes. If Apple were serious about ATV, they would realize that this model makes business sense and incorporate free IPTV on their device.
It seems odd to think that people who are currently watching TV over the air, a clearly low tech approach, are going to jump from that to Apple TV, a high tech approach. I do not see that demographic driving sales of Apple TV
If Apple added an HD DVR I’d be the first person in line to buy one (or maybe I’d buy three). I don’t have much use for the AppleTV as it currently stands, unfortunately. Add a DVR and it becomes one of the most used electronic devices in my house as soon as it’s installed.
Tivo and the Cable-Sat Companies need some real competition. They jerk customers around with inferior product quality, stupid navigation and menu interface tangles, and most of all, moronic hardware and software feature omissions that blatantly demonstrate their butt-kissing of media corps.
Apple could easily design a superior product all the way around. Blindfolded. With one hand tied behind their backs.
This is actually what I was calling for after hearing the last conference call. What was the new product that would drive down margins so much and be an revision of an existing product? They have no reason to drastically kill iPod margins to the extent required for match the guidance. They referred to early product cycles with high prices but followed with reduced margin as time progressed. They still referred to ATV as a hobby, but how long would Apple keep playing with a ‘hobby? They only hobby until they learn enough or the market is ready enough for the big move. The margin will be razor thin here but worthwhile as moving into the living room will have a tremendous halo effect. There will be features that make having a Mac, iPod, or iPhone great with the new ATV. Apple will touch so many new homes that doors will open for all their products!
Only problem is I’ve been convinced by others this isn’t for Sept! Well, if not now, I guess I can wait until January. You can’t have world domination in a day.
Allrighty, nice of y’all to comment. I assume most of you are too lazy to mozy on over any updates I make over at http://petersmagnusson.com so I’ll cross-post here:
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Ok so it’s kind of cool that if you do a Google search on “Apple TV 3.0″ right now, 5 out of the 10 top hits are all this blog posting. But it’s kind of sad, too, since it points to the low level of interest in what’s up with the “fourth leg”. Notably, the Apple 2.0 column at Fortune picked it up for a morning piece, so there are a bunch of comments on that site. But this is my blog so I’m responding to them here first (I’ll cross-post). So here are some updates/clarifications, in no particular order:
1. Yeah, yeah, I know that Apple TV has wifi and that the remote app is already there. I should have edited more clearly, but I wanted to accentuate what features are really important and go together. So stop pestering me about it.
2. An astute reader pointed out that the $40 rebate does not apply to multi-featured devices. My bad. Typical bad government subsidies (they can’t help themselves from using *our* tax dollars to in detail control *our* lives, sigh).
3. I know the Apple Mini kind of can do this stuff. That’s why I have a picture of one, ya dopes. But *quite* doesn’t cut it in consumer land. It needs to be out-of-the box and cost effective. Ze devil is in ze details.
4. I know modern TVs have tuners. But you need the tuner straight into your digital box if you want good quality DVR.
5. I appreciate the “Apple doesn’t want to upset the content providers” comment, but I think the reverse is true. Thanks to the personal power of Jobs over Apple strategy, they are indeed the *only* player that is willing to risk rocking the boat. That’s, after all, how the iPod came about. And indeed, to less extent, the iPhone.
6. People arguing that physical media is dead should take a second look at the DRM on BDs combined with the profit margin per BD. Physical media ain’t dead yet, folks.
7. Yes, Apple TV would also need to provide an SD output solution.
8. No, this won’t cost $1000, or $800. This should be doable under $400. Especially since it will drive other revenue (iTunes store).
9. One reader pointed out that this would make a great device to take along on family travel. I agree! A bunch of movies and simple games and just plug it into the hotel TV!
10. Yes it would be nice if they were to support more formats, notably divx. But I don’t think that will happen, and I think it could be a compelling (but not perfect) product without those useful codecs.
11. Those of you who complain that you don’t need the HD for NAS backup, you guys really should try Time Capsule for a while. It’s addictive.
Phew, I think that addresses most points. Thanks for reading and commenting, y’all.
Nice wish list. While your at it why not throw in some more:
- improves fuel efficiency on up to 3 of your vehicles
- bakes perfect cookies and cakes at the press of a button
- creates fully customizable woman/man
- doubles your brain power as needed
- creates gold nuggets
- opens gateway in house to more roomy dimensions so we can all live in tiny flats that have as much room as we deem necessary
Seriously. Because all these are about as reasonable as the things your asking. It’s Apple, they don’t do what the customer wants. They do what they want and tell the customer it’s what they need. But lucky for you, you will accept it.
I’m just waiting on USA to finally go digital, so that the PlayTV can come out for the PS3 in America, and do/have all that this guy wishes for, and MORE.
I WANT DVR ON MY PS3 NOW!!! =[
1) Apple TV is 100% awesome - with some less than legal tweaks. Use iSquint to convert TV shows from torrent sites to Apple TV - excellent - much better than watching on iMac.
2) iPhone App Store has a free “remote” app that can control AppleTV and even has thumbnails.
3)It doesn’t need 500GB - You can back everything up to your Mac.
4) DVR would kind of counter the iTunes Store.
Here’s an idea. Jobs should just update the mac mini (chip, HDMI port, etc) and buy plex and add DVR.
Plex kicks ass.
Lots of good comments here. I’ll try and respond to the sane ones at my blog http://petersmagnusson.com
What has always stopped me from buying an ATV, is content. yes there is plenty of content, but it is mostly mainstream BS, missing most of independent and foreign movies and old foreign movies by the “masters”.
that is where netflix is still hard to beat and more convenient.
no mentioning the fact that if you “rent” a movie trough iTunes, you need of watching within a short time lap before it expire.
and you can’t beat a blu ray disc for quality, with net flix you can get 3 blue ray movies at the time for 13.99 and keep them as long as you want. and nothing will stop you from watching 12 of them in a month for those mere 13.99.
I want it all and it seems it is going to be Apple or Google to get it done. Tuesday is big…really big.
Erik of NY said “It seems to me that people who currently get their TV signal from a rabbit ear or roof top antenna are not exactly early adopters who are likely to run out and purchase an Apple TV.” Digital TV (DTV) broadcasting is back to the future, Erik: over-the-air HDTV is superior if picture quality to either satellite or cable. It’s also FREE.
Get that antenna back up…
One thing’s for sure:
New AppleTV introductions should happen in September or October so that they can lead into Christmas sales.
Holding them in January is probably the worst time of the year.
The only way I would buy an AppleTV is if it supported many more video formats, such as DivX. (and I’m a huge apple fan)
DVR Yes. I would buy it for this reason alone. I’m really looking to ditch my DirectTV and start to choose my content I watch more precisely. I hate paying for content I will NEVER watch with DirectTV. If Apple makes it simple and feeds me content…for close to free, I’m way in!
The iPhone and iPod Touch can already by used as a remote with the free app Remote. He must have miss that memo.
I have to wonder what device Magnusson’s wish list is for. It’s certainly not Apple TV.
The Apple TV has had WiFi since its launch. iPhones and iPod touch are already supported as remotes as of the 2.0 software update for those devices, if you have current Apple TV software. I also wonder what “internet video” feature the device lacks that Magnusson wants?
It won’t have an ATSC tuner, ever, because Apple TV is designed to be plugged into your *HD* television. HDTVs are overwhelmingly digital-capable out of the box. The older TVs that require converter boxes don’t have the appropriate inputs to plug into Apple TV, and would require expensive converters.
Similarly, DVR capability is almost certainly not happening. Most people who would want to record TV already have DVR boxes from cable, satellite, or other TV providers. It’s going to be a very small segment of the market which has antenna TV and a need to record it. Also, A DVR would directly compete with the established iTunes model of buying episodes commercial-free.
As for more impacting features like Safari, it would seem difficult to do that without some kind of *pointing device*. USB keyboard support would be a fantastic win for keying input into iTunes, but if you’ve ever tried to TAB-navigate a web page — the experience sucks.
As for Time Capsule, it’s uncertain what Magnusson proposes to actually back up. If you have a computer, Apple TV can sync rented and purchased music and movies (except HD rentals) to it. Once synced, your computer(s) could automatically back them up to Time Capsule. Unless you had outstanding HD rentals, you’d lose ZERO data if Apple TV failed. HD movies are multiple gigabytes in size, and would quickly exhaust space on Time Capsule. The studios also might have something to say about it, given the invasive DRM on HD movies in disc form.
Putting in a Blu-ray or DVD or CD player runs counter to the idea of what Apple TV is.
Apple TV is whatever Apple decides it is. If they put an optical drive in it, then AppleTV is even more of a comprehensive multimedia entertainment unit.
Why have such a large hard drive when it plays fine synced to a computer?
Not a bad question. Networked hard drives and shared network drives are a less expensive way of achieving the same goal. Leopard filesharing is just three clicks away. Windows is similarly as easy.
Doesn’t it already have WiFi? How else does it play stuff from your computer?
Yes. I think the author was drunk.
The most important thing for Apple TV is a DVR function. That is the killer app. Once it has that, it will be a runaway hit.
Definitely agree. I also think they should make a Netflix “Watch Now” app, but you make the point of conflicts of interest…
There’s no reason they shouldn’t do it all.
Exactly what I was thinking… which is why it won’t happen.
Apple never gives us the product we know we want. They give us the products we didn’t know we wanted.
A modular Apple Media Center which one could plug a ATSC Tuner, BluRay, Game Console, whatever into… sounds magical but it’s simply not how Apple does products. Name one Apple consumer product that isn’t sold as a complete package? (careful the Mac Pro isn’t a consumer product).
I don’t understand why the Apple TV hasn’t taken off. It is hands-down my favorite purchase for the year. We no longer go to Blockbuster; we just download from our TV and within about 30 seconds the movie is ready to watch. Also, all the photos I have ever taken are available through this slick device — images that were transferred wirelessly from my iMac.
yeah…we’re all trying to get AWAY from physical disks, so forget the blu ray drive, etc.
A DVR function could be cool, and imagine if I’m away from home, and can program my Apple TV to record a show I would otherwise miss! Killer app!
A bigger HD is always nice, though streaming is fantastic, it DOES require the host computer to be ON, and iTunes to be on as well. OK, so my iMac is on 24/7, but maybe not everyone wants this. And wouldn’t it be nice to take your Apple TV on vacation and have all the kids favorite shows on hand( far from that host computer?)
Bingo. Someone finally talks about this. Apple Video is the product transition. All their products are eventually going to be incorporating video through Apple TV 3.0 or whatever you want to call it. I wouldn’t be surprised if this is announced for at least one of their product lines tomorrow.
I will correct myself, Seems as though component video will work on the 2nd gen Apple TV.
Annnnd even if these were added, what would it do to the cost of the device? This “wish list” is right up there with “I want a pony” in terms of practiality.
PED, maybe the first thing that you should have addressed is that in order for ANY of this to work the appleTV would have to support televisions WITHOUT HDMI connections. You can not use an older SDTV with component/s-video/composite connections with the AppleTV. If apple really wants to sell these boxes they will have to add a standard def video output. This is the ONLY reason that I have not purchased one.
I think this is what Apple’s going to do… Because they said their margins will be going way down in their conference call, and because the title of their event tomorrow is “Let’s rock”, I think Apple is going to give people free, unlimited iTunes downloads if they buy a Mac+iPhone. It will cost Apple $0.70 or so per download, and they probably hope people will average less than 1,000 downloads.
One of the greatest hurdles the Apple TV faces for mass appeal is that it only works with hdmi or component interfaces (i.e. RGB). This may not seem like much of an issue for those who own flat screens or newer sets, but I believe that the majority of consumers still own TVs with coax or the red, white, and yellow audio/video inputs.
Physical media is a dead stick.
I thought this blog was supposed to be “outside the reality distortion field.” Someone shoudl just tell Magnusson to plug a Mac Mini into his TV, and then to the Mini, connect an EyeTV and a Blu-ray player. Boom.
It seems to me that people who currently get their TV signal from a rabbit ear or roof top antenna are not exactly early adopters who are likely to run out and purchase an Apple TV.
Of all the rumours/speculation out there on what to expect tomorrow, this one makes a lot of sense to me and just seems to fit with the evidence. (And I like that no one else is talking about this, which makes me think there may be something to it as well, but that’s more voodoo prediction than anything educated.)
Steve seems to have a certain fondness for Apple TV that most of the rest of the world doesn’t seem to share, and it seems that it’s got to mature and take off soon or go the way of the Newton and the Cube. Personally I have not had much interest in the Apple TV (and even Magnusson’s proposed changes probably would not change my mind substantially), but it’s not hard to see a third iteration being bundled in with iPod announcements to try to build up that “fourth leg” into something with a bit more weight.
Putting in a Blu-ray or DVD or CD player runs counter to the idea of what Apple TV is.
Why have such a large hard drive when it plays fine synced to a computer?
Doesn’t it already have WiFi? How else does it play stuff from your computer?
The most important thing for Apple TV is a DVR function. That is the killer app. Once it has that, it will be a runaway hit.
The problem is that Apple doesn’t want to upset their TV programming partners by including that. The exact same conundrum that plagued Sony between the content creators and the CE division trying to make mp3 players.
Hopefully Apple doesn’t fall into the same trap long term. But I don’t think Steve Jobs understands TV like he does music.
No DVB-T tuner here in the use only 8-VSB (ATSC Standard). The Ideas expressed are very good. Lets hope Apple Listens.
You don’t say it explicitly, but you suggest that the $40 coupon program could help apple sell a new Apple TV. Sadly the $40 coupon program does NOT extend to any device with HDMI, or Component Video interface. Interfaces Apple will most likely not be willing to exclude.
Rule d. 54. http://www.ntia.doc.gov/ntiahome/frnotices/2007/DTVFinalRule_2e.htm
ex ped: Excellent point. Will update to reflect your comments.
This is pure speculation.
No proof whatsoever.
If the author had get one of the government approved set top box himself, he would have known they all have the same basic design..they all look the same except the label.
So Apple TV is not going to become a HDTV receiver and be able to use the $40 from the feds.
The could add more feature on it but I doubt it since it’s really a dead horse with bad rap.
apple has laptop and music player and phones and I think that’s enough competitor for them to fight off…
Microsoft has xbox and apple will never get there to compete…not with no game developer/distrubutor support.
I think they will concentrate on music, laptop and phones instead where they have a chance.
Nice idea, but the modern HDTVs with which the AppleTV is designed to work are generally sold with integrated DVB-T tuners, so don’t require new hardware.
A much better be for Apple would be to couple the device with a touchscreen remote control (as it already partially supports the iPhone/touch) and introduce an app store specifically for the big screen.
Nice point on the timing of converter boxes, though it’s worth noting the current Apple TV is not, in fact, a TV tuner. In fact, iPod owners can have a “poor man’s Apple TV” by just buying a video-out cable.
Here’s an idea: base a new Apple TV on the iPhone OS platform, giving it access to the App Store ecosystem, and use a Wii-like pointing system for the UI. I blogged this a while back as Apple TVii.
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Silicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
All these comments saying oh it does not need this it does not need that. Philip Elmer-DeWitt is spot on the money here people. Listen up! If it had all these features, I like you would be lining up in droves to get one of these bad boys…. Bring it on!!