Why I'm Not Dismissing AppleTV

Echo To All submits: Throughout out the pass few days I have seen article after article about dismissing AppleTV as a viable product. The premise of these negative articles had some vindication the other day when Apple (AAPL) CEO Steve Jobs himself said at “D” that AppleTV was more of a hobby.

I disagree with the bashing of AppleTV, and I think Jobs is doing what any leader would do (and what he is greatly known for)… downplaying the importance.

Apple is a great company, and its most valuable assets are the ideas the company is able to generate and its understanding of the digital age consumer. With the creation of iTunes, and the understanding that most people want to own professional content, iTunes is a hugely successful means of content distribution.

With millions of people owning their own content ranging from (currently mostly) music to movies, this effectively makes their computers a personalized data base. The laymen out there need a product like AppleTV to take full advantage of their personalized database, especially on the video side of things.

Now the above argument is not new; it has been mentioned many times before by other bloggers. What is new now is that AppleTV users will be able to watch Google's (GOOG) YouTube on their TV. (This was always rumored to be the case, but now it is confirmed.) The fact that YouTube is on here is great, and benefits both Apple and Google.

What I find most interesting about this feature is the fact that AppleTV has opened its platform to a video site. There is nothing stopping Apple from doing a similar deal with other sites like Joost and others that offer quality content from traditional media or maybe even the media companies themselves. If Apple can pull this off cable distributors should be worried. This is when AppleTV will be a product for the masses that are truly frustrated with their bloated all-in-one cable bill.

Of course, old media stupidity may stand in the way. If I were a content creator I would make distribution deals with whomever I could, but old media does not work that way. At least not yet.

Comments

[David Lentz:]

You're correct in the "old media" often has strange ideas about how to move their products in the widest manner (usually choosing to lock them down and jack up the prices), but nobody has more experience with dealing with them and their mindset than Steve Jobs.

The AppleTV makes sense on many fronts. Compare it to the HDTV version of Tivo, and you have a $300 product with no subscription fees competing with a $700 product with annual fees in the neighborhood of $300.

Yup, AppleTV doesn't do "true" HD -- but with the average home bandwidth running somewhere less than 2 Mbps, I don't think that the domestic market is quite ready to be downloading content at 5 GB per hour. 5 GB/hr approx = 50,000 Mbps/3600 sec/hr = almost 14 Mbps for HD content, or about 7 sec to download each second of HD content over a 2 Mbps connection. That's a multiplier of 7 times playback time, if you're going to pull HD over the internet.

So everybody who does HD via the internet does some watered-down form of it, and AppleTV is no exception. When I take my over-the-air-recorded MPEG2 HDTV content and convert it from the (approx) 5 GB/hr to an AppleTV format, it typically occupied around a gigabyte, and playback is far, far better than standard-def TV, and I would estimate (subjectively) about 90-95% of HDTV quality.

I'l be interested to see what kind of ramp-up Apple is seeing in video content being sold via the iTunes Music Store (why don't they rename it the iTunes Media Store?), as well as the growth in unit sales of the AppleTV. I suspect that we won't see any of those actual numbers until Steve's annual state-of-the-business presentation at Macworld SF 2008 next January -- when I think we might also see a significant re-vamp of the AppleTV product. Until then, he's going to play these cards very close to his chest.

2007 Jun 01 08:54 AM

[rennard:]

I with people would stop regurgitating inaccuracies such as this. The Apple TV most certainly <em>does</em&... do "true" HD - anything upto 1080i in fact !

I have been enjoying watching downloaded 720p episodes of US shows, thanks to file sharing networks and Visual Hub to convert them to AppleTV format. It works great. As I type this, I'm just listening to the latest podcasts, played through the HiFi in the den with my AppleTV connected to a small flat-panel screen, and it's a superb experience.

If the AppleTV has a fault, it's just that (like many Apple products) it's ahead of it's time. I honestly think that the AppleTV could be the biggest long-term hit in Apple's product lineup. Even the iPod got off to a slow start, and I think in 2 or 3 years time people will regard the term "AppleTV" as synonymous with IPTV, just at they say iPod when they mean 'digital music player" today.

2007 Jun 01 11:22 AM

[David Lentz:]

Reading back my above comment, it strikes me that I should have explained where my 5 GB/hr figure comes from. That's a rough approximation of the storage consumed when capturing over-the-air HDTV content as broadcast in native MPEG2 format via the el gato eyeTV product, which is basically an HDTV tuner/receiver with a USB port. The actual storage consumed for an hour of content varies depending on the content, but 5 GB per hour of content is a good mid-range value for 1080i or 720p HDTV.

2007 Jun 01 08:59 AM

[Pauly B:]

"PB"

I agree 100 % with your assessment on Apple and Apple TV. A few things technically that need to be overcome for Apple are :varying broad band bandwidths throughout the country. Not all of us have great speeds and for sharing content this creates problems. Who knows maybe he will partner with a cable company next and we will only have one box in our living room?, His.

Greater stability in software- all need to be rock solid for the average user and super easy to use, and

Apple needs long term vision as to how they will further integrate into the media space. If done to fast or wrong it could blow up in their face with either government regulation or court injunctions. There could be some bloody battles ahead because of the dollars involved.

Mr Jobs and Apple is a true visionary and will likely overcome the obstacles. I see nothing but success for the long term for Apple.

2007 Jun 01 11:35 AM

[ET:]

Agreed and accurate.

2007 Jun 01 09:20 AM

[Sr. Pessimist:]

I think the h.264 standard is the best available, and Apple has that going on in their Quicktime, but I don't know if Internet transmission rates are capable of sending video even at that level. The lines are going to be really congested and the huge pictures like this will be compromised. HD is going to be a hard trick to pull. The codecs are necessary to make it borderline, but there still will be compromises. People may wait for 10 minutes for a movie to buffer sufficiently over broadband to their hard drive so they can enjoy a more-or-less problem-free VOD digital movie, as it is. Using MPEG-2/AC3, HD movies take around 20 GB, as we see with HD-DVD's and Blu-Ray's initial capacities. 20 GB can take a long time to download. h.264 reduces it to easily half that, but we're still talking about bandwidth problems. It's not there yet for HD. The market conditions don't make it a financially viable endeavor for immediate profitability. That's not to say that video over the internet won't be on your home big screen. Just not with the exact current conditions. Full throughput for HD with surround is around 13 megabits per second, I think. Something impossible like that, using current standards. Just something impossible to forget about. It's safe to say it won't happen that way.

So Steve Jobs made no mistake. He hit the market quite right, in my opinion. There will be a new version of Apple TV anyway.

2007 Jun 01 01:27 PM