TV – In a recent article, PC Magazine has suggested that Apple will not only not renew any home entertainment products but in the longer term, the company will abandon all home entertainment activities related to TV viewing.
PC Magazine argues that while Apple TV was once at the forefront of TV technology, it is not any more, as Roku, Google and Amazon have surpassed it in functionality. With no update for the last two years, PC Magazine believes that there will be no further updates on Apple TV.
It sees this as a pure business decision based on the fact that Apple generates most of its revenue from iOS devices. Why should the company go after the home entertainment market with an uncertain outcome?
PC Magazine’s arguments are certainly valid and it could be right, depending on how one would interpret Tim Cook’s recent interview. Cook stated that the company has an ongoing interest in the home entertainment market, but he also said that the most difficult decisions at Apple are what not to pursue.
Display Central Comments
I believe that Apple’s decision is mainly based on the size of the market opportunities. Given the size of the home entertainment industry, this is something Apple would not easily drop without very good reasons. Here are some reasons that could sway Apple to give up on home entertainment:
- Apple sees the home entertainment market slowly shifting to a ‘mobile entertainment’ market. If mobile devices capture more of the entertainment market in the future, Apple is not only well positioned, but may become a market leader in the entertainment market.
- Apple does not see a chance to create a viable business model for the home entertainment industry. The combination of content creation and delivery is currently a complete mess. Many players are trying new approaches that lead to confusion and insecure market positions.
- Apple sees too much competition in the home entertainment field with many approaches mirroring each other or excluding each other. Amazon Fore TV is creating an infrastructure that allows the user one-stop shopping, basically a script out of Apple’s typical playbook. However, consumer tastes and preferences change rapidly when it comes to entertainment content. How can one compete, if some of the content is captive? Whoever wins this spring, may very well lose in fall if a new show on a different (captive) channel is more successful.
There are also many other options that Apple may have in mind. There is the new smart home business, where the Apple TV could be so much more than just a little black box. If the mobile entertainment sector actually takes off, as some reports on content viewing suggests, at least for younger consumers, Apple will need access to content to keep iTunes at least in the running. In the short term this will require an Apple TV as viewing platform. In the long term, home entertainment as we know it maybe a thing of the past, just like the good old VHS tapes and DVDs. – Norbert Hildebrand
