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The Future of Apple TV

It has been a little over a week since launching my first book, “Take Control of Apple TV,” and the response has been tremendously gratifying, with sales just cracking the 1,000 mark. Federico Viticci of MacStories called it “a must-have for Apple TV owners interested in knowing everything about it, and well worth $10.” Bradley Chambers of Chambers Daily and the Out of School podcast, said, “It’s written in such a way that you don’t have to be an Apple nerd to understand what he is talking about.”

I was also invited onto a bunch of podcasts to talk about the book. Thanks to Chuck Joiner of MacVoices, Gene Steinberg of The Tech Night Owl, Benjamin Alexander of Pulling the String, Zac Cichy of The Menu Bar (warning: explicit), and Kelly Guimont and Benjamin J. Roethig of the TUAW Talkcast for having me on their shows to chat about the Apple TV.

One thing that I was asked about on each show was what I think the next Apple TV, rumored to be announced this spring, will look like, so I’d like to address that here. I touched on the topic in “FunBITS: Why Apple May Win the Gaming Market,” (4 October 2013), but I’d like to expand upon what I wrote there.

Much of the rumor mill surrounding the Apple TV revolves around Steve Jobs telling Walter Isaacson that he had “cracked” TV. But remember, a key fact is that Steve Jobs lied. Intentionally. A lot. Among other things, Jobs claimed at various times that no one wanted video on an iPod, that people didn’t read anymore, that Apple wasn’t working on a tablet, and that Apple wouldn’t do well in the cell phone business. Would Steve Jobs tell his biographer something juicy just to send competitors into hysterics? You better believe he would.

The Future of Apple TV -- First off, I don’t think a fourth-generation Apple TV would look radically different from what we have today. I see no advantage to Apple offering a full-blown TV set. Remember, Tim Cook is a supply chain guy; he doesn’t want larger products if he can help it. Smaller products mean more can be crammed onto ships, planes, trucks, and in the back of Apple Stores. Apple’s chief problem is supply constraints; the last thing it wants to do is exacerbate that. Worse, TV sets need to come in a variety of sizes to accommodate different viewing distances, and it’s hard to imagine Apple being interested in stocking three to five different set sizes.

If anything, the new Apple TV might be smaller, though I doubt it, as Apple now uses the same casing for both the Apple TV and AirPort Express. That’s a production efficiency that’s hard to give up.

Nor do I think Apple will partner with TV manufacturers like Roku has done. It’s not in Apple’s DNA to partner with hardware makers on major initiatives, and it has never worked well for Apple in the past.

So what will we certainly see? I think an A7 processor is a given, likely along with an iOS 7-style design refresh. It’d also be hard to imagine a new Apple TV without 802.11ac Wi-Fi. Since Apple introduced the third-generation model chiefly to add 1080p support, I think 4K support is also likely, especially given reports that Apple is building its own content delivery network (CDN). Apple could get a big jump on the upcoming 4K market by being one of the first to offer 4K streaming content.

Apple might also enter into partnerships with cable providers that would enable you to use your Apple TV to replace your cable box, streaming live content through an Apple TV app that would also provide program listings. Don’t expect to see a clunky coaxial connector in the next Apple TV, but rather an arrangement similar to what Microsoft has with Time Warner to use the Xbox as a streaming cable box. Doing so doesn’t count against bandwidth caps, and I could see Apple making similar arrangements, which might also help explain why it’s building a content delivery network.

Another possibility, and one I’d like to see, is support for Bluetooth audio devices. You can already AirPlay audio out of an Apple TV, but if you want to use wireless headphones, you’re out of luck (I offer a rather clumsy workaround in the book). Given Apple’s push for its own proprietary AirPlay standard, I can see why the company is hesitant to support Bluetooth audio, but at the same time, it’s also an accessibility issue. What about those who rely on Bluetooth-enabled hearing aids?

Apple could also add support for Bluetooth game controllers, a recent addition to iOS 7 and OS X 10.9 Mavericks. But the only reason to do that would be for gaming support, which would mean an Apple TV-specific App Store. I’m hesitant to predict that, since it’s been rumored since the second-generation Apple TV.

Why has Apple dragged its feet on an App Store for the Apple TV? One reason is personnel. Just as on iOS, Apple will want to approve each app, and that’s not an insignificant investment. Another is storage. The Apple TV has only 8 GB of flash storage, mostly used for buffering streaming content. An App Store-enabled Apple TV would need at least 16 GB — 8 GB for buffering and another 8 GB for user storage — and more might be necessary given the size of some modern games. A third problem is that Apple, unlike Roku, offers its own content store. Would Apple be willing to allow an Amazon Video app on the Apple TV, offering access to a competing content store?

Another rumor is that Apple will combine the Apple TV and AirPort Express into a single product. On the surface, this makes sense, as they use the same casing. But if it were your business, would you want to combine two inexpensive products and charge half the combined price? I wouldn’t. But as a customer, I’d scoop one up.

People like to speculate on Siri being used with the Apple TV, but I can’t see it, for two reasons. First, Siri just isn’t sufficiently reliable to be a primary interface. Second, the Apple TV interface is extremely physical, with most interactions being repetitive button presses. It’s also hierarchical, with content often duplicated in multiple apps, which could lead to clumsy interactions for anything beyond the simplest commands. Perhaps Apple could use Siri to cut through the interface, but I think it’s a long shot.

So there you have it. I doubt we’ll see anything mind-blowing in the next generation of Apple TV, but Apple loves to introduce products that people laugh at, only to dominate the market a short while later. People mocked the Mac, the iPhone, and the iPad, but who’s laughing now? Tim Cook, all the way to the bank.

The Apple TV Business -- It’s important to bear in mind, whenever you read rumors or speculation about Apple, that Apple is a hardware business at its core. Apple isn’t about software, online services, or even changing the world, it’s in the hardware business. Much as they may generate non-trivial revenues, the App Store, iTunes, and iCloud all exist to add value to and create platform lock-in for the hardware devices where Apple makes its real money.

At $99, the Apple TV, in Apple’s eyes, isn’t yet a platform, but merely an accessory that adds value to the company’s real breadwinners: the iPhone, iPad, and Mac. Apple doesn’t make enough money on the Apple TV to invest the sort of resources into it that the company puts into mobile devices.

How could that change? The answer is cable deals, which could propel Apple TV sales volumes into a “real” business.

The genius of Apple’s iPhone business is that it has two customers: you, the owner of the phone, and the carriers. Apple markets to individuals, who then largely go to the carriers to purchase. The carriers buy iPhones at full cost, sell them to you for cheap, and make up the difference with expensive service plans. By selling through the carriers, Apple increases the retail footprint and penetration of the iPhone in a big way.

What if Apple did the same with the cable companies? Cable box interfaces are notoriously awful, and if Apple offered a significantly better way to access TV programming, subscribers might demand it. The cable companies could then make a deal with Apple to distribute the Apple TV, giving them to customers for free, or for a low monthly rental fee.

Once there was sufficient penetration, Apple could then add an Apple TV App Store, creating a situation where every Apple TV user is potentially an Apple customer as well. The cable companies would continue to own the pipes and offer the programming, but Apple would control the interface on top of everything, and that’s where the true power lies.

Of course, this is wild speculation (and the cable companies are undoubtedly wary of such a move by Apple), but if I worked for Apple and wanted to turn the Apple TV into a real business, it’s the angle I’d take. Because isn’t this what Apple does best? Identify a market with room for technical and interface improvement, build a better solution, and then take over.

Regardless, don’t put too much stock in these imaginings, and enjoy your Apple TV for what it can do today. Nor should you worry about your Apple TV becoming outdated quickly. My second-generation Apple TV still gets all the latest software updates, and I expect it will for the foreseeable future. And if you need help making the most of its current features, grab a copy of “Take Control of Apple TV!”


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Comments about The Future of Apple TV
(Comments are closed.)

Tommy Weir  2014-02-21 14:20
I can't see an App Store for the AppleTV. At least not on the model we've seen on iOS or OSX. I can see Apple inviting select content providers to offer apps via some other structure than a store. Which may involve validation via cable supplier. Which would be terrible. But I can see it... Validate supplier, select from menu of additional content apps.

I wonder how Netflix and Hulu might regard all this, whether they may regard the arrival as encroaching upon their appeal.
Josh Centers  An apple icon for a TidBITS Staffer 2014-02-21 14:25
I can see an app installed on the Apple TV called "Watch TV." You log into your cable provider and it gives a unified interface for content, regardless of which cable company you're with.

As for Netflix and Hulu, remember that this would be a two-way street. Yes, Comcast would be encroaching on Netflix, but Netflix would also be encroaching on Comcast.

It saddens me to see so many Apple TV apps require cable authorization, and I don't think that was an easy decision for Apple. But these companies are powerful, and often own quite a bit of content themselves. If Apple wants to eventually work around them, they first have to work with them.
Marcos El Malo  2014-03-04 18:49
Why not on the model of iOS? Sure, some productivity apps would be a bad fit, but many apps could be useful. Additionally, completely new classes of apps might be created that take advantage of the different interaction model.
JohnB (SciFiOne)   2014-02-21 16:03
Sadly, unless they provide a component output or some other way to record burnable content on my compuer, Apple TV will never be of any use to me.
Michel Hedley  2014-02-21 17:31
How US centric is Apple TV (and for Take Control of Apple TV)?
Tonya Engst  An apple icon for a TidBITS Staffer 2014-02-24 12:54
I'd love to have some folks who live outside the United States and have Apple TVs replying to this question about Apple TV content.

As far as the ebook goes, "Take Control of Apple TV" was written with an awareness that some readers don't live in the United States, and it has some content that is more international, such as a discussion about how to modify your apparent IP address. So, I don't think that readers who are outside the United States will feel invisible.

But, the ebook doesn't try to detail what offerings are available in countries outside the United States, or to address any peculiarities of particular countries besides the United States. (There must be some peculiarities, though I don't know of any off-hand.)

The majority of the ebook, however, is not about which apps are available or how to figure out how to watch the latest Sherlock Holmes no matter where you live. Most of it is about topics that will be the same no matter what your location.
I live in Mexico. Some apps, like ESPN and the Disney ones, are missing (the ones that require authentication with a cable provider, apparently), but we do have bloomberg, crackle, NHL, MLS, that one with all the Korean stuff, etc. I can provide the full list if needed.

There is also iTunes in the cloud, photostreams, the iMovie thing. For iTunes Radio there is only the old way, with stations from around the world.

I also have a Japanese account and can rent stuff with no problem. The change from apple IDs from one country to the other is absolutely seamless. Hulu japan is IP restricted though.

So, at the very least, here in Mexico, the Apple TV is pretty good package.
Josh Centers  An apple icon for a TidBITS Staffer 2014-02-27 11:54
Thanks David. Are there any Mexico-specific apps?

For Hulu Japan, you could try unblock-us to make it appear that you're coming from Japan. There's a week-long free trial if you'd like to try it. If you can get it to work, let me know!
Marcos El Malo  2014-03-04 18:51
David, I would love it if you supplied a full list!
iCloud Photos
Wall Street Journal Live
Red Bull TV
iMovie Theater

...and, no, there are not Mexico-specific apps. Only iOS, Android and the Xbox 360 get those.
The author misses the real point of including a router in the AppleTV directly. AppleTV adds value to Apple's other hardware and ecosystem. It gets iTunes content onto the big screen and allows for wireless sharing of content on iOS and Mac devices. Adding a router is the killer feature that puts AppleTV's into every board room, and conference hall across the world.

You see, today to stream data to an AppleTV you have to be on the same network as the AppleTV. If it is a router, you could connect to it directly to do presentations with no concern about getting people onto your internal network. IMHO

Adam Engst  An apple icon for a TidBITS Staffer 2014-02-24 05:20
I think some businesses would be quite distressed to have a router in the Apple TV, since it would add a different vendor's router and management software to an existing wireless infrastructure (few businesses of any size are likely to standardize on AirPort Base Stations - they're consumer gear). Plus, anything that's outside the normal wireless infrastructure could very likely be a security risk, since such an Apple TV would have to connect to the corporate network for Internet connectivity and then create a wireless network for clients to connect to.

But who knows - perhaps Apple has a plan for making this all work.
Peter Sichel  2014-02-24 16:55
"Apple is a hardware business at its core. Apple isn’t about software..."

I think you could say this in a way that is much more insightful. Apple is in the business of selling much better user experiences. These usually involve tightly integrated hardware and software, so it is about software, but Apple earns most of its revenue from the sale of tangible goods. For accounting purposes, software is not included in the bill of materials even though it is the secret sauce that defines the product.

How does this relate to Apple TV? Apple won't do a serious TV product unless it believes it can create a much better user experience. What aspects of the current TV experience are just begging for improvement?

1. Paying for expensive cable TV packages with 100s of channels you don't care about.

2. The channel guide and content discovery mostly sucks.

3. Lack of access to web content.

4. Lack of integrated entertainment like the App Store game library.

5. Ubiquitous AirPlay.
Peter Sichel  2014-02-24 17:04
Following up, most people don't care about 4K displays or Bluetooth speakers, but buffering web content for smooth playback is a huge problem. Apple is reported to be building their own Content Delivery Network.