David Lentz

Why I'm Not Dismissing AppleTV

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.