Why Apple's iTV Box Might Be A Flop

Earlier today, I ran through some of the glowing praise on the Street for yesterday’s series of announcements from Apple (AAPL), including the iTV media hub product, which was the day’s biggest surprise. But not everyone thinks the iTV thingy is going to be a success. Take, for instance, the popular blogger Thomas Hawk. (According to his site, Hawk is a pen name for a guy who works in some non-tech investment advisory firm.) Anyway, Hawk thinks it isn’t going to sell:

So let’s see. I’m going to pay $300 for a little dongle that will allow me the privlige of paying Apple $10-$15 to buy movies from them at less than DVD quality to watch on my new HDTV Plasma? Or…

I can just stick with Netflix, pay a heck of a lot less and not have to buy the $300 little dongle thing.

The problems with the little $300 dongle are:

1. It’s not even out yet.

2. People are buying HDTV sets. Maybe the mainstream is not there yet but they are almost there and once they see Discovery HD Theater for the first time they will never want to watch low res crap again.

3. People who want hot new content for their new HDTV plasma will not want almost DVD quality.

4. We havent’t even started talking about HD DVD and Blu-Ray yet which are around the corner and will blow “almost DVD quality” away.

5. With the introduction of the new HDTV TiVo earlier today, the new dual CableCARD HDTV Media Center (and XBox 360 extender units for multi room viewing) due out early next year, as well as relatively inexpensive HDTV PVR offerings from the cable and satellite providers (unless you happen to be DISH and are screwed), why in heaven’s name would anyone pay Steve Jobs $10-$15 for crap quality content?

Yes, yes, there will always be the appleheaded lemmings who will buy anything Apple whatsoever but this is clearly *not* a very good value proposition.

Comments

[Frank Z:]

Okay enough with the "Apple will fail" mantras. You're being disingenous when you omit the fact that you'll very likely to be able to play MP4, DivX, XviD, etc along with the movies you "have" to purchase. Those formats do come in higher qualities and people do know how to get them no matter how dumb they pretend to be. And those files look great on my 32 incher. I currently use a hard drive based media box that plays those files but it will be great to have one that streams well from my PC. In that, I'm confident Apple will do a great job!

2006 Sep 14 09:34 AM

[Tom B:]

1) AAPL does not NEED this business to grow their company.

2) AAPL has poisoned the well for competitors, if nothing else, by setting a bar.

2006 Sep 15 11:50 AM

[Daniel Dilger:]

RoughlyDrafted Magazine offers some commentary on the iTV:

Why Apple Will Change TV
www.roughlydrafted.com...

Apple’s iTV: Clues in USB
www.roughlydrafted.com...

Apple’s iTV & The Case of the Missing DVR
www.roughlydrafted.com...

2006 Oct 06 02:24 AM