AppleTV Has a Lot of Catching Up to Do

Remember back in September of 2006 when I said that Apple's (AAPL) new iDongle (i.e. AppleTV) would fail because, among other things, it didn't have a DVR?

Well it looks like that might be changing shortly. AppleInsider has published a report saying that in a series of Apple patent fillings published this week, Apple has quietly been working on their own DVR technology. The patent filing details with diagrams how their new DVR might work.

In my opinion AppleTV has a long way to go to catch up with Microsoft (MSFT) and their Media Center/Media Center Extender strategy. But adding a DVR to AppleTV would definitely represent a positive step forward for their product.

Even with a DVR built into AppleTV though, Apple would still have lots of work to do. While some people (myself included) are very happy with OTA HDTV broadcasts (read: free HDTV where you can skip commercials), many people these days still want a device that can record HDTV from cable or satellite. While CableCARD Media Center PCs are still relatively new for Microsoft and their hardware partners, they have at least navigated the early maze with CableLabs to build these sorts of devices. I'm not sure that Apple has really done much here or that these patents show any considerable effort towards anything other than a straight OTA DVR.

Apple has an amazing brand name. Building the right set top box could be done and using their name in the marketing with the right product would give them a lot of momentum. But today's AppleTV, the iDongle, is not the right product. And at this point they still have a lot of catching up to do.

Because of this, their AppleTV strategy thus far has largely failed. Just like Thomas Hawk said it would back in 2006. Why would I buy an AppleTV which has no DVR, no DVD player, and no kick ass gaming platform when I could just buy an XBox 360 for the same price that does have a DVR (through Media Center), that does have a DVD player, that can do pretty much anything AppleTV can do, plus comes with a kick ass gaming platform?

Comments

[Steve B.]

Yeah.. I sure wish I had bought an XBox, so I could throw away all the HD-DVDs I got for Chistmas. Oh well.. Guess I'll have to find another product to waste my money on..

Why do you need a DVD if you are downloading movies directly from the source? You do realize that Blu-Ray players are $400 a pop right now?

On demand from your couch at your convenience. DVD format wars and expected BluRay price gouging are driving people toward an Internet solution. Sony got it wrong .. again.

Apple will use the power or their distribution channel (iTunes) and portable media player integration (iPhone, iPod Touch, iPod) to make Apple TV more compelling. Is it a must have. Nope. But it will make them money until they figure out a way to improve the device. I expect a touch pad controller for Apple TV with swipe, page, pinch whose affects will appear on your TV set. Safari browser. iChat.

Afterall, isn't the Apple TV an electronic Internet device running Mac OS X Lite?

[User 163676]

This article is looking backwards in technology.

Apple TV is setting the future. Forget any format of DVD in 5-10 years, Blue Ray is just another product to become obsolete when everything is on demand HD video via the internet.

This will also break the cable companies cartel with their 200 channels of useless programming when you pay for what you want, when you want it.

Apple TV is a computer connected to the TV. Everything people use a computer for today can be formatted for the TV - shopping, email, video, communication, games etc. Stay tuned...

[peter02l]

Spare us the "no matter what Apple does, it's not enough." Go shoot some bad guys on your XBox and leave us alone. All Apple TV owners I know love the way it works and don't care to play games on it.

[Danthemason]

Peter 021 is correct, 163676, is correct. ATV is the future. It works flawlessly, it is upgradeable. We have many choices in the market. If you need something else buy it. The biggest bump AAPL has to cross is the average consumer's attachment to physical media. The digital divide requires a leap of faith on their part.

[Jon T]

"AppleTV has a long way to go to catch up with Microsoft (MSFT) and their Media Center/Media Center Extender strategy."

IS THIS GUY FOR REAL?

Microsoft's strategy - in place for years - is precisely nowhere. That statement says all I need to know about the quality of Thomas Hawk's 'analysis'.

[fauxscot]

Gaming? Are you serious?

Does Tommy have a little pituitary problem that prevents him from attaining adulthood?

Gaming?

Honestly, as someone who doesn't watch TVs, DVDs, or shoot aliens, this quibbling about gadget feature sets for the quasi-sentient among us escapes me. I'll just go by the 'units shipped' number and see what happens to my Apple stock, thanks.

[Rob L]

I'm long Apple, but I agree with Thomas. Now maybe if they could link up games with the ATV and iphone....maybe download the games through itunes to the ATV, using the iphone as a controller....hmm.

[digivision]

it took MS how many years to get the xbox "right" ???
the current AppleTV is not perfect but Apple is doing the right things .. quietly, they will eventually change this game as well ..
one update at the time
I personally couldn't care less about DVR capabilities a few features I'd like to see :
a built in sat. receiver with Apple offering satellite content
(hint buy freaking dish network) or even better come up with your own
and most important incorporate a technology like the sling media where you can stream tv programming to your iPhone or laptop

[digivision]

I want true a la carte programming without having to pay for unwanted channels

[Mark_G]

Ignoring the long term development, the biggest suprise I saw with macTV was no streaming of iTunes radio, no Safari browser and no (TiVO) TV player/recorder. Despite that, I stilll find it a good box to have, and the kids don't keep nicking to play games on.
The other minor gripe is that I would like to be able to bin the my movie library on my host macbook to free up some disk space without losing the movies on the macTV. Yes, I knowI could play with moving my library to an external drive etc but thats a cumbersome boring fiddle

[Richard_K]

Actually, Apple TV meets my needs pretty well. I want to rent movies. Tried the local video stores, but recent DVDs are always out. Tried Time-Warner, but it can't ever deliver On Demand films during peak viewing times. Apple TV and iTunes store just works.

[User 163771]

Uh...Anyone ever heard of Tivo HD? It does it all. They are the leader and have bullet proof patents on DVR technology. Ask Dish.

[Davewrite]

From the companies view: Msft has lost huge amounts of money on the Xbox. It has lost money every quarter except the last due to Halo induced sales (but bungie has since jumped ship). Whether that single quarter's profits have helped Msft is in doubt as due to the thousands of faulty Xboxes (overheated and burnt out) Msft has put out over a billion dollars in warranty claims. Msft has lost money on practically all other initiatives as well including the Zune subsiding losers with software sales. In half a year the iPhone has overtaken Windows Mobile. Apple makes money practically on everything it does. That's why Apple (with a fraction of the PC market) last year made 24 billion while Msft made 51 billion, i.e Apple's revenue is half Msfts. (most people think Apple is a dwarf compared to Msft but not revenue wise) , that's why Apple stock has grown over 1500% the last five years while Msft has grown 30%. In short Apple knows what it is doing with all its products.

[AdamC]

Like someone asked 'Is this guy real' I am sure he is and at least 10 years backward looking.
I am 5 years backward looking and this is what i saw AppleTV will be like the iPod, all your movies in 1 device.
Who needs DVD or Blu-ray?

[lrd]

Catching up to who? Apple's leading the way even with their less than stellar numbers.

[peter02l]

If Apple does come up with a gaming platform, I hope it will be a separate box about the same size as the AppleTV that connects to the USB port in the back. So, those of us who don't play video games won't have to buy it as package.

In fact, just imagine for a moment if Apple should make a deal with Nintendo to produce a less expensive version of WII to connect to AppleTV!

[T Muller]

I bought an Apple TV a few weeks ago. I love it. It's unbelievable. YouTube is key. Many of my friends that have seen mine are planning to buy one too.