Apple's New iMacs: Reinventing the Digital Movie Experience

I got a few questions as the result of my speculation earlier about Apple's (AAPL) new 23-inch iMac being the company's entry into consumer HDTV. Well, today, we got the official announcement that the iMac is actually a 24-inch one with Core 2 Duo upgrades. But after the first few questions that asked if I was crazy, the most common query was, "Why would Apple go into the TV business?"

Here's my take. Apple wants to sell movies from the iTunes Music Store (presumably up for renaming someday soon) because it can profit from the wonderful economies of digital distribution. But once the consumer downloads that movie, how can Apple guarantee them a good experience that will bring them back for more?

Sure, people can play their movies on their computers. But think about that. You settle down in your chair and start watching a movie on your desktop. That's fine for about the first 30 minutes or so, and then you start getting uncomfortable. So you move things around a bit, maybe adjust the screen some more, and tough your way through it. But at the end of two or three hours, it isn't fun any more, and I predict, most consumers will rapidly migrate back to Blockbuster DVDs or Comcast video on demand if watching on a computer is all that Apple offers. It's just not a compelling and comfortable consumer experience.

Some will say, Apple's digital movie business is to support the new video iPod. Could be. But again, how great an experience is it to watch a full-length movie on a seven or nine-inch screen? And more importantly, how likely is that to drive sales of millions or billions of copies of digital movies?

No, digital movies are designed for people to sit back in comfortable chairs and become immersed in a movie experience. That means having a high-resolution image and good quality sound. And mobile experiences are a part of this, they aren't the bulk of the demand. The real demand is in the living room. And that means Apple needs a device there to deliver that experience.

When the Internet boom started in the mid-1990s, Apple sparked consumer adoption with its all-in-one iMac. Why? Because consumers could unpack an iMac and be on the Internet in 5 minutes. That was a huge differentiator in a market where the more traditional Windows experience was an hour or more of unpacking, connecting, installing, and configuring boxes. Simplicity sold and re-started Apple's business.

The HDTV market and digital movie delivery today is still in its complex connecting, installing, and configuring infancy. Apple has the same opportunity to reinvent these markets with a new plug-and-play system that radically simplifies the process, an iMac for Internet HDTV. Will they? We should have a better idea on September 12. I may be crazy, but from where I sit as a marketer, it's Apple who would be crazy not to do it.

Comments

[Donnie Millar:]

This misses the point. Apple is not getting into the Television business. They are however, interested in entertainment. Apple has repeatedly expressed their interest in media and entertainment in the annual report. In fact, they have hinted for a number of years at creating a digital media center. They are uniquely poised for this being an integrated hardware/software company, and this is most likely the direction Apple is headed.

Frontrow is only the beginning. Apple will likely introduce a video capable Airport Express next week coinciding with the release of Movies on iTunes. This will allow customers to download the videos and movies onto their computer and stream them wirelessly to their TV across the room.

Only a select group of consumers will use the 24" iMac as a regular viewing solution. My guess is, most want it because it is a sleek, sexy machine with a big, bright monitor and a kick ass video card.

2006 Sep 06 07:54 PM

[Tom B:]

On-line free content, like YouTube is more engaging, IMHO, than the drek like "American Idol" we see on commercial TV. This presents Apple with an even more compelling value proposition for the idea of getting into the TV biz NOW. It is also a ripe market in that PC makers have fallen on their face here, delivering no notable integrated systems.

2006 Sep 07 09:08 AM