Is Apple’s Hobby Losing its Hobby Status?

December 22nd, 2010

So the news comes this week that approximately one million of the new generation Apple TVs have been sold, raising hopes that this perennial hobby product that might, some day, shed that status. But do these initial sales signal a trend, or will the rate fall off sharply after the holiday season?

Now at $99 per copy, the Apple TV is a fairly casual purchase as holiday merchandise goes. Compare that to the original Apple TV, the hard-drive based products that resembled an AirPort Extreme. The final price of admission was $229, making you think twice before buying one.

Today’s Apple TV consists of a tiny black case, a quarter the size of the original, and it owes more to the iPhone than to a Mac, using Apple’s A4 processor and the iOS. The previous version used subset of Mac OS X for its operating system, and a low-power Intel processor.

In contrast, it appears Google TV isn’t doing so well, with so-so reviews of the expensive gear that uses the new system, and reports of tepid sales. Rather than blaze new ground, Google appears to have attempted to resurrect the original failed WebTV concept, with a keyboard that will turn your TV into an Internet access device and, of course, help you see the targeted ads that keep Google in business.

This isn’t to say Apple has conquered the living room. I believe Steve Jobs when he said that the current state of affairs with cable and satellite companies makes that near impossible. A big impediment is that they usually give away their hardware, or lease it to you at a very low price. Either way, there may be no way for Apple to compete big time, unless they, too, give the Apple TV away with the hope that they’ll make a profit from iTunes movie rentals. Fat chance!

But the Apple TV opens up a lot of possibilities, even though the feature set today is rather limited. In addition to iTunes, where you can rent content or stream from your Mac, PC or iOS device, you can also view content from Netflix, YouTube and Flickr. However, being iOS based, there’s nothing to prevent Apple from crafting pacts with other content providers and offering them simply as additional apps. Since the key is to sell hardware rather than content, Apple shouldn’t put any locks on the door. Since Amazon has e-book apps on both Apple’s desktop and mobile platforms, what’s to prevent them from offering video content from Amazon on an Apple TV?

Now I got an Apple TV from Apple for review very shortly after the original release. I do use it, though not often. It offers a better Netflix interface than the clunky menus on my Samsung Blu-ray player, and I have rented TV shows that I forget to record. The problem, however, is that those 99 cent TV rentals are limited to two networks, ABC, Fox, Disney and BBC, with no indication when or if the rest will come aboard. So even if you hope to replace your cable or satellite service, and don’t mind a potentially far higher price of admission if you’re a TV junkie, you’ll end up disappointed. Buying lots of TV fare and streaming it via iTunes is even more costly. How about a subscription service, Apple?

There were other shortcomings as well. Apple’s remote appears to operate at a far more limited angle than most others I’ve used, so you have to point it straight on to make sure the unit receives the command. I have considered taking my Logitech Harmony Universal remote and adapting it to Apple TV use, but that’s won’t help of the set top box’s own reception window is the limiting factor.

The other problem is rather more serious, although I hope the most recent software update, not yet installed, with address it. Sometimes a movie will, after staying to play, halt to buffer content all over again. My wireless connection is powerful, broadband speeds are quite fast, but the problem happens nonetheless. I’ve seen others complain about the same symptoms, except for most reviewers of the Apple TV, who either never observed this symptom, or didn’t do their research to see what problems actual users might have confronted. But I expect, if it hasn’t been solved, it will be before long.

The real issue, once again, is the age-old question of whether large numbers of people want another box to compete with their attention on their TV. More and more of the newer sets are incorporating their own Internet features, including Netflix and other services, some of which Apple doesn’t yet offer. The interfaces won’t be as simple as elegant as what Apple is offering, but the convenience factor of not having to buy yet anther set top box is going to present problems for Apple TV’s long-term success as something other than a hobby.

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2 Responses to “Is Apple’s Hobby Losing its Hobby Status?”

  1. Dave Barnes says:

    My wife (the iPod, iPhone, iPad junkie) bought an Apple TV unit yesterday.
    She thinks it is cool as she can watch movies she has stored in iTunes and streamed from Netflix.

    I am not sold as I want something that provides MSNBC, HGTV, Travel and Discovery (and, yes, I only care about 4 channels) and let’s me drop the $110/month cable bill.

    • @Dave Barnes, There’s no way to get those four channels without the $110/month bundle?

      But the real problem is that the content providers will probably never let Apple offer Apple TV as a cable or satellite replacement. Too many entrenched interests.


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