Much has been written lately based on Steve Jobs quote from his biography that he had “finally cracked it” – referring to solving the problem of how to make a better TV set. Stock prices have gone up and countless analysts and pundits have put forward their thoughts on the subject. Now it’s my turn.
Almost every house has a television in the western world. There are a lot of houses and that means there are a lot of televisions. Then again it’s an old market that is already quite saturated. Many of the worlds largest electronics companies make television sets including (but not limited to) Sony, Samsung, LG, Hitatchi, Palsonic, Conia to name just a few. The next problem is, unlike PCs and Mobile Phones people don’t buy televisions very often at all. Often they will use the same television for as long as 10 years before buying a new one. Competition makes margins slimmer and innovations regularly copied.
To break into this market Apple will need three things: an innovation that only they can provide (and is difficult to copy quickly), patience (lots and lots of patience) and commitment. Of course any Apple television will have high build quality, be very likely thin, light and relatively free from buttons and likely sporting a manufacturing technique that competitors will have trouble matching. This will differentiate their hardware, but this is not the only innovation they will need to succeed. The content must also take a step up from what the AppleTV currently provides – more movies, more live sports (that can be subscribed to via Apple/iTunes naturally) and more on-demand news. The television must also support all existing technologies – doubtless by a dozen or so legacy adaptors sold separately. Finally a new interface that does away with the clumsy square that is moved around the screen by a glorified D-Pad on the AppleTV. Instead a simple remote with a microphone built in and possibly only one button on it. Siri or its descendent will take your verbal commands to control the television. Expect the AppleTV to get this feature in the next 12 months as a trial run from the main event.
These three things put together will make the Apple television innovative in a way that competitors will find difficult to match. In the same way that Apple has taken technologies it perfected in its existing products and then used them to create the iPhone, Macbook Air and iPad, so they will bring them together into an Apple television. It’s the next logical, and frankly, obvious step.
It will not sell as well as the iPhone. It will not sell as well as Macs or iPads. It will sell slowly, but surely, increasing in sales volume with time. There will be naysers, pundits that criticize their attempts, and the stock will probably suffer in the short term. Apple need to be in it for the long term.
Apple will not dominate the television market for a very long time – if ever. Breaking into this market will require dogged determination and huge financial resources. If anyone was to do break into the television market and push the technology forward however, Apple would be the one to watch.