In the eighties, I read a memorable marketing book called Positioning by Al Ries and Jack Trout. Now recently republished, it helps explain the phenomenal attention Apple is getting with its latest foray into consumer electronics, the Apple TV set-top box. It also explains its potential for huge success, among a hoard of competitors.

John DiLoreto
Analyst and Editor for
Insight Media

Although sources have bemoaned over attention to Apple TV, others, like Information Week, see the consumer electronics landscape more clearly: Apple, alone, has successfully positioned itself to a broad base of consumers as a company that can deliver elegance, ease of use, compatibility, sophisticated technology and performance…and fun.

According to Information Week, Apple TV has the potential to alter the media landscape and surpass TiVo and Netflix in equity value. ThinkEquity Partners financial analyst Jonathan Hoopes foresees some 25% to 70% of the 22M Mac users, and many more PC users, buying the device in the next five years, enough to eclipse both TiVo (4.4M subscribers) and Netflix (8.8M subscribers).

Citing Apple TV’s simplicity of design, its remote and Front Row software, Hoopes said ease of use would be "a major driver for rapid adoption among users who are tired of having to master ever-more-complicated configuration menus and user interfaces that are common in today’s consumer electronics."

While he is not a market analyst, we think he got it right as he approached this a simple consumer. Everything Apple has done has been consistently and uniquely geared toward the same esthetic goals-and done successfully over a period of time. The result is having created an image in the consumer’s mind of a solution that will be trusted to work elegantly, despite the complexity. That’s the essence of position marketing.

Take Microsoft as a counter-example. Over past decades, Microsoft has tried to be almost everything to everybody in software and hardware. Remember WebTV? The Microsoft Mouse? OS software for almost every tablet, handheld, cellphone, and set-top category that came along? MS also plays in headend VoD and IPTV delivery software. And reports have been mixed.

Microsoft’s comparable product to Apple TV, the Xbox 360, drives personal technology pundit and New York Times columnist, David Pogue crazy with its copy-protection schemes’ limitations. The user interface, with a million interesting features, as he describes, sometimes bombs out during rewind or fast-forward with the message: "Can’t play this content because it may not be supported. Status code: 69-00-80004005."

Even so, it’s not how the product performs, but what potential customers think of it. Microsoft has failed the positioning game for the "last 50 feet" - the problem of getting Internet video to your TVs.

Other contenders to this high-pressure space have fared no better in capturing consumer imagination. Netgear Digital Entertainer EVA8000 is aimed at geeks who know their way around a network, Pogue admits, but it is not that useable for ordinary consumers.

And with all the hype, others are joining the fray. HP has a new line of TV sets with this feature built right in. Linksys, D-Link, GoVideo, Hauppage, Philips and others all have similar boxes on the way. Several companies sell Windows Media Center PCs that look like VCRs and can work with Xboxes on other TVs.

But the basic question is whom would you trust given the complexities and potential pitfalls of trying to enjoy computer-delivered content on your TVs throughout a house?

Apple has a multi-decade legacy of a singular focus of delivering products consistent their ease of use and elegant performance image. And they’ve promoted that image. That’s position marketing at its best, and it will continue to give Apple a huge advantage.