Your Digital Living Room May Be Furnished By Steve Jobs

Who will emerge victorious in the fight for control of our digital living room? In mid-December we surveyed 228 consumer electronics industry professionals on trends for the digital living room – including which companies stand to win or lose.

Going beyond the latest Apple TV announcement, the survey focused on the future of “media centers” – which we define as high-powered devices capable of managing a variety of digital content in the living room or around the home (e.g., video, pictures, music, etc.). In a finding sure to make Steve Jobs chortle, industry respondents cite Apple (AAPL) as the media center manufacturer with the best chance of mass market acceptance.

Looking at currently available products, which media center device/manufacturer do you think has the best chance of mass market acceptance?

Industry members are also quite bullish on the prospects the Apple TV set-top box will be a huge success upon its release – now set for February 2007.

Apple recently released iTunes 7, which includes the ability to download movies in addition to TV shows and music. Apple has also announced a new set-top box – nicknamed “iTV” – which will offer a range of connectivity options designed to get iTunes content onto TV screens. How likely is it that “iTV” will be a huge success in the first year after release?

Moreover, when asked which 'digital living room' company should be on our ChangeWave radar screen for 2007, Apple is by far the most mentioned by industry respondents.

Of all the companies - large or small - involved in products and services for the digital living room – which one(s) do you believe should be on our radar screen during the coming year?

As one Alliance industry respondent puts it, “Apple has shown the ability both to innovate and simplify its designs to consumers…iPod is opening channels to Apple in a big way.” Another writes, “They understand the biggest impediment to adoption is that people hate complexity, they just want to plug in and play.” A third adds, “Apple’s the one to watch with Apple TV coming out in 2007. This device will extend Apple’s dominance in the delivery of digital content.”

Sorry Bill

In what could best be described as a less-than-enthusiastic reception, Microsoft gets only mixed reviews regarding the media center capabilities of its new Vista Operating System (40% positive; 46% negative).

How would you rate Vista's Media Center capabilities? Do you think it provides a quality user experience and will win mass market acceptance as a Media Center platform? Or does it fall short – either technically or in terms of user friendliness?


Bottom Line: Apple has a big lead in the struggle for control of the digital living room, with a growing perception inside the consumer electronics industry that Steve Jobs and company are dominating this space. We do note that industry opinion is still split on when media centers are going to have a big breakout year – with only 11% believing it will happen in 2007.

When - if ever - do you think a Media Center device (or a similar competitive product) will have a big breakout year in the mass market and become a central feature of the digital living room?

But whenever media centers do take over the living room, the industry sees Content Providers (28%) as being the most important driving force behind mass market acceptance – even more so than Electronics Companies (24%) or Computer Companies (20%). Funny thing is, Apple's business model is now a combination of all three.

Which of the following market segments will be the driving force behind mass market acceptance of Media Centers?

....

This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

Comments

[JamesBiringer]

Really, is that right?? I would say that at first Apple will dominate this. But, one thing this article doesn't get into is Verizon's new fiber network. And one key element in this network is the Network Interface at the side of the house, which contains a demultiplexing card to change the fiber signal into three components: telephone, internet, and video.

What's that got to do with the price of corn?

Well, with the presence of this demux card, you now have a physical demarcation between the outside network, and the inside network. So how long before somebody besides me, figures out that if my video signal and my internet signal have a common termination point(the demuxer card), that also happens to be secure from the rest of the network, with the right demuxer card, I could transfer anything on the computer to my digital dvr in my living room?

Without running any extra wires...

Hmmmmm... this fiber network that the analysts hate right now is starting to look interesting.
Much like the network upgrades that Ivan pushed through years ago on the wireless network.

Not a bad job on Ivan's part, considering 25 years ago he was a splicer.

Thanks,
James Biringer
Owner - Verizon401k Newsgroup
finance.groups.yahoo.c.../

The opinions expressed in this email are those of
James Biringer. They are not intended to be
recommendations of any security, only his
opinion. As always, investors should do their
own due diligence and research, and
invest with caution.

[David Lentz]

It will be interesting to see what fraction of AppleTV sales go to Windows systems. It should be possible to use iTunes and AppleTV to add living room PC-to-TV capabilities without using the Windows Media stuff at all.