This is an editorial that I wrote in Display Monitor in March 2010. Most of what I said still seems relevant today!
Once again, rumours of a possible move by Apple into the TV market were floated when an analyst for Piper Jaffray said that he expected the company to make a move into TVs as they became more internet-connected. Clearly, there’s an obvious extension from mobile applications, with the iPhone to the iPad to notebooks and PCs and then onwards to the TV. Samsung has already ‘seen the threat’ and is trying to develop an ‘Apps’ platform for its TVs that it can extend downwards to phones, just as Apple could extend up to TVs. To that extent, a move by Apple would be logical. Why take control of only two of the ‘three screens’ (mobile, PC and TV) in the user’s life?
On the negative side, TVs are a fiercely competitive market driven almost to commodity status. That would be like the mobile and PC markets, then. So we can assume that the idea of competition is not a problem for Apple. TV is a slightly different market than the others because of the very high share of the value that comes from a single component, the display. However, Apple has shown that it can innovate with suppliers in that space and has a close long-term relationship with LG Displays, among others. OLED should, of course, start its entry into the market as a premium technology that gives a sleek form factor and a visually compelling image quality and gives power advantages (especially with a ‘black background’ interface like that of the iPhone). The introduction of OLED TV could be an interesting opportunity for all the brands that consider themselves as premium brands.
Apple’s core strengths in recent years, however, have been in truly understanding the importance of content to drive device sales (with iTunes on the iPod and Apps on the iPhone) and in user interfaces. Long term readers will not need reminding of my oft repeated mantra ‘software sells hardware’. With TV, Apple might face real resistance as it seems to be seeing in the book publishing world with its iPad. Publishers have seen the power that Apple has won over music delivery with iTunes and are ‘putting up a fight’. We suspect that video content providers will have the same concerns.
User interfaces are a secondary core strength for Apple. Back in June 2007, when Apple launched its ‘Apple TV’ STB product, I highlighted that the user interface was very good and way better than anything on other TVs. I said “Apple’s solution is much more sophisticated and easy to use than anything else we have seen”. Pete, our then editor, took the box for an ‘extended evaluation’ and it quickly became a permanent and valued part of his home system, even though there were significant limits and restrictions to the content available. When it launched, Apple had already organised a deal with Youtube to watch content on the box (it needed special transcoding to H.264). TV companies that are still thinking about their approach to hybrid TV are some years behind.
I also thought, at the time, that the Apple TV was a good way for Apple to start to understand the TV market and world, without having to stock, ship and warranty the ‘monitor’ that it needed.
It seems to me that a genuine TV from Apple remains a possibility and a real opportunity. There are good reasons why Apple can offer something unique in user experience in terms of the user interface and the industrial design. We hear a lot from TV brands about the importance of design in selling TVs, but the reality is that most of them are almost identical. At a Display Monitor review meeting, it was pointed out that although we have been doing a better job in getting pictures to go with product news stories, the pictures themselves are often dull and that is partly because the sets basically all look the same. Apple could use its design skills to really create some interest.
We’d certainly rate the idea of an Apple TV as a ‘probable’, rather than a ‘possible’.