We picked up a story on the wire this morning from the Mac side of the planet. You know those pesky, "for the rest of us" guys that insist on swimming upstream, against the swift current of technology "du jour" like XP, Vista, and Windows Mobile. Worse, they keep inventing speed boat-like technologies to navigate these swift waters, offering users slick alternative products to the barge-like behemoths-winning fans and market share by delivering what the customer actually wants.

Steve Sechrist
Senior Analyst and Editor

Well, chalk up one more for the little guy, this time in IPTV video delivery. Jonny Evans at MacWorld reported today that the Apple TV is leading the nascent web video device market with projections for the category to reach 1.2M units next year, according to a recent ABI Research study.

For its part, Apple is trying to do for video, what it did for the CD market - transition it into the digital era, with a set of ground rules and easy to use interface the rest of us can easily understand and use.

But the task may not be so simple this time. The IPTV market today is convoluted with a myriad of delivery alternatives, as diverse as the Internet itself. A recent Infonetics Research study, published today, tracks not only these new IPTV application specific devices, but service providers, middleware vendors, and conventional set-top-box makers.

Not an easy task, the IPTV equipment includes integrated digital headend platforms, VOD/streaming content servers, universal edge QAMs, IP video encoders (split by MPEG-2, MPEG-4, standard and high definition IP). Plus, IPTV middleware/content delivery platforms (CDPs), and IP STBs are covered. Infonetics goes on to say, IP STBs, IPTV services, and IPTV subscribers are further split by pure IPTV vs. hybrid IPTV/over-the-air vs. hybrid IPTV/QAM.

As this suggests, the internet is simply an alternative content delivery and distribution solution to existing over-the-air (ATSC), Cable (QAM), and satellite providers. It is also the main reason why Google market cap has soared since going public, as they have found a way to monetize Internet content delivery.

Add to this, the media-server concept, (that’s a PC in the living room connecting your widescreen HDTV to the internet) home networking attempting to stream QOS video through a (wireless) and sometimes noisy networking environment, and it’s easy to see how far away from a plug-and-play solution we are today.

Enter Apple TV. They seek to bring some sanity as a solution by leveraging the iPod/iTunes concept for video. Millions of users already know the interface, and have downloaded over 1 billion (with a B) iTunes and counting. And for its part, Apple is right. Content drives the success of iTunes, and will drive the success of Apple TV or any like-iteration.

But the question remains is this adaptation of a great mobile solution, the most viable for home living room consumption? Ask a teen, who grew up in an iTunes world and you may get a resounding yes. Ask an old fogey (even a technology one like me), and the answer may be different.

Case in point: NBC recently broke with the Apple "walled garden" model, presumably due to some unrealistic expectations from the old broadcast guard. As an alternative, they partnered with Fox and formed HULU.com, an ad-driven web download site with some of the most sought after content on TV today. For the HULU beta users anyway - no fees, no hassles, just video streaming directly (in this case via a media server) to your HDTV; even an iTunes driven teen can appreciate the economics of "free."

So the experts believe given proper market conditions, 2008 may indeed be the breakout year for the IPTV device category and products like the Apple TV will finally see some significant adoption numbers. It will be interesting to see if the speedboat called Apple TV has enough power to overcome the swift current of free content, paid for by ad-driven revenue. Stay tuned.

Reply to the author