"We try to develop products that seem somehow inevitable. That leave you with the sense that that's the only possible solution that makes sense...What we're working on now feels like the most important and the best work we've done..." Jony Ive
As consumers and investors speculate the potential of an iTV from Apple (AAPL), we at EconomicTiming.com are considering the possibility that this new product is closer than many expect. As I read the above mentioned Telegraph interview with Apple designer Jony Ive, the idea that Apple always manages to arrive where it's supposed to arrive stood out to me.
The detailed reality of an iTV presents numerous inconsistencies within the Apple business model: How could Apple reconcile charging $1500-$2000 for an iTV when the Mac Mini can be purchased for $599 and an iMac can be purchased for $1199? In order to justify such a price point the iTV can't simply be a watered down computer, it needs to offer something that is equal to or better than the smaller Macs. Other questions: Does Apple really want to confuse users with yet another iteration of an App Store? Does Apple want to create a special iTV OS in addition of iOS and OS X? Would Apple be comfortable launching a new iTV App Store with limited content if providers are slow to join? It's questions like these that caused me to consider the possibility that the consensus expectation of an iTV might not be what Apple has in mind.
Apple is better than consensus.
What if the future of television isn't a television at all? The best way to predict the future is to extrapolate the present. Consider the following seven reasons why it makes perfect sense for Apple to launch a Mac TV rather than an iTV:
- The Mac lineup is worth investing in. The current product mix of iPhone, iPad and Mac is a solid foundation but there is a growing concern of Mac cannibalization. In the most recent quarter, Apple sold 35.1 million iPhones, representing 88 percent year over year growth; Apple sold 11.8 million iPads representing 151 percent growth; and Apple sold 4 million Macs representing 7 percent growth. Of course this kind of PC weakness isn't an Apple-specific problem: take a look at Dell and HP's latest earnings reports to see what I'm talking about. But that doesn't mean Apple can't revitalize the industry. If Tim Cook wants to leverage the Mac brand and keep it at the forefront of a relevant industry, it's going require innovation. Branding a 60-inch iTV as a Mac TV would rejuvenate the Mac lineup and pave the way for smaller models to evolve the PC industry into something completely different than it is today. This TV launch is a great opportunity to redefine the future of the Mac rather than destroy it.
- A Mac TV would enable Apple to utilize the Mac App Store. Instead of starting from scratch with developers, why not put a renewed emphasis on the Mac App Store? This store already has more than 10,000 applications, and would provide the Mac TV with a large enough base to please consumers at launch. I'm sure Apple would develop a few unique applications for Mac TV to add to its current group of iLife and iWork applications which will make it feel more like a television than a computer. It's also likely that content producers like Disney and ESPN would launch some cool apps to spruce up the Mac App Store at launch. Apple shouldn't reinvent the wheel if it doesn't have to. The Mac App Store is waiting for a new product.
- Mac screens are rumored to gain ultra-high resolution retina displays at the WWDC on June 11th. Although it would be impossible for Apple to implement the same resolution on a 60 inch Mac TV as it does with its iOS devices, even a lesser version of the incredible technology would surpass current HDTV standards. Bringing Apple's retina technology to a larger screen is coming soon whether there is a TV or not. The 27-inch iMac, that basically looks like a TV anyway, is rumored to get retina display. The natural evolution into larger screen sizes is certainly conceivable.
- Mac TV would provide users with a seamless transition between iOS and OS X. The iTV interface is rumored to include Siri voice control, touch pads, and iPhone/iPad mirroring as ways to interact with the product. Eliminating the need for a keyboard and mouse in order to operate a computer is the big issue in the living room. People have rejected the living room keyboard for years. This is the primary reason why Mac Minis haven't already revolutionized the Internet-TV model. As the norms of iOS evolve to become the norms of OS X in Apple's 'back to the Mac' initiative, it enables a Mac TV to spring into existence. To have a new product called iTV using Mac's OS could cause more confusion than Apple would like. Keeping the company focused on iOS and OS innovation jives with Apple simplicity. As an added bonus, the new OS would turn every existing Mac into a Mac TV in terms of interface. The mouse/keyboard would merely be a differentiation of choice for those who so desired.
- Mac TV solves the pricing inconsistency that iTV might cause. If Apple released an iTV that was basically a watered down iMac it would fail to justify a higher price point than the 27-inch model. By releasing iTV as a Mac TV it ensures full functionality which is deserving of a $2,000+ price point.
- Mac TV would lessen the odds of a high priced iTV failure. It is no secret that even Apple would have a difficult time selling significant volume on a $2,000 product. For this reason, it makes sense to also include smaller more inexpensive models. The 21.5 inch iMac and the 27-inch iMac would create an $1,199 entry point for what is essentially the Mac TV technology. By marketing the TV this way, Apple would avoid having to reveal the sales breakdown by model. Even the iPhone struggled because of its high initial price point back in 2007.
- The name Mac TV would ease the legal burden of stealing the iTV trademark. In the United States Apple would have to deal with iTV Entertainment who has already released a warning for Apple to stop infringing on its trademark. The bigger problem would arise in the UK where iTV is owned by a major television network that operates four television stations and has been in business for 60 years. We all know that when Apple really wants something it will do whatever it takes to get it but if there is a path of lesser resistance why not take it? Mac TV represents a proprietary technology that would truly inhibit competitors from entering the market. Nobody else has the Mac as a secret weapon like Apple does.
Is there any chance that a Mac TV could be announced at the June 11-15 WWDC? The official invitations to the event read, 'It's the week we've all been waiting for'. For that statement to hold any ounce of truth, we expect Tim Cook to be showing off the much anticipated TV. However, the only credible rumors circulating prior to the event are related to software upgrades and a refresh of the Mac lineup. Maybe the TV we've all been waiting for fits seamlessly in between both of these expectations. Using the June WWDC as the time for a Mac TV announcement would provide developers five months to prepare for the holidays. It also allows Apple to negotiate with the television networks in public rather than in secret. Public pressure to join the Mac App Store with a library of content as well as with live programming will cause some to join who otherwise would have remained on the sidelines. Needless to say, we'll be watching the Tim Cook keynote with keen interest and our ears will perk up if we hear him utter those famous words 'one more thing'.