Last updated: November 29, 2013 7:32 am
By Tim Bradshaw in San Francisco
It is the revolutionary television that gadget fans have been waiting years for. A camera recognises you and instantly personalises the screen. Ask what is on the Discovery Channel, the voice recognition understands and shows you. Call up Breaking Bad, and the device offers a choice of episodes on live TV, Netflix or its own video service.
This might have been the Apple TV that Steve Jobs had in mind when he told his biographer Walter Isaacson in 2011 that he had “finally cracked” the perfect user interface for TV.
Apple TV compared
Chromecast, PS4 and Xbox One
But instead it is Microsoft’s new Xbox One console, which has received rave reviews for its media-centre capabilities as well as gaming.
“Using voice to navigate around the TV experience opened my eyes to the potential with this experience. Other boxes have tried this and failed,” said Ben Bajarin, analyst at Creative Strategies, in a review of the console.
A year ago, when Tim Cook, Apple’s chief executive, began to raise expectations that it was about to launch a new TV product, the company’s existing set-top box was par for the course in a market of humdrum streaming devices and clunky smart TVs. But now it looks in danger of being left behind by the more radical steps taken by its rivals.
As well as the Xbox One and Sony’s PlayStation 4, which both sold 1m units in their first day on sale this month, Google has released its $35 Chromecast, which allows smartphone-toting couch potatoes to transmit wirelessly whatever is on their small screen to the big one. It works with most devices that can run Google’s Chrome web browser.
Apple offers something similar with its Airplay feature, but it is limited to its own devices and its Apple TV receiver is three times as expensive.
At the same time, Samsung is courting developers to make apps that run on its mobiles and smart TVs, as well as touting integration between them for consumers, such as carrying over a film from a TV to a tablet when you leave the living room.
“A more advanced living room play is beginning to look like a growing opportunity for Apple,” says Dan Cryan, digital media analyst at IHS. “The rest of the market has moved on a lot.”
Google, Microsoft and Samsung all have viable “ecosystems” that encompass the biggest screen in the house and the smallest in the pocket, Mr Cryan says, while Apple still sits on the sidelines in TV.
While the Xbox One console is delivering Apple-like revolutions to TV viewing, the iPhone maker could yet take on Microsoft, Nintendo and Sony at their own game . . .
“It would be strange for a company as involved in entertainment as it is to not try to further its involvement in the one major screen and point of interaction out there in consumers’ homes that it’s not already got some kind of story for.”
This week, Apple paid about $360m to acquire PrimeSense, an Israeli company that provided some of the technology behind the previous Xbox’s motion-sensing device, Kinect.
“Some sort of living-room appliance is in Apple’s future and gesture technology could be critical,” wrote analysts at Jefferies in a note to clients this week, calling PrimeSense a “global pioneer and leader in gesture technologies.
“Smart TVs and gaming consoles are key recipients of these technologies.”
However, Jefferies analysts also described Apple TV as “the Unicorn”, as it had been rumoured for so long without ever being seen.
Apple executives have been dropping hints about its plans for the TV market for almost two years. Mr Cook said on several occasions throughout 2012 that it was an “area of intense interest”.
“It’s a market that we see, that has been left behind,” he told NBC last December in a rare TV interview. In May, he said Apple had sold more than 13m TV boxes to date, about 6.5m of which were in the previous 12 months.
A more advanced living room play is beginning to look like a growing opportunity for Apple. The rest of the market has moved on a lot
- Dan Cryan, digital media analyst at IHS
Since then, however, Apple’s progress in TV has fallen short of the revolutionary. Its existing $100 set-top box has acquired new channels such as HBO Go, ESPN, the NFL and Sky News.
But while the iPhone and iPad’s user interface has seen a complete overhaul, the Apple TV still looks pretty much the same as before software design duties were handed to Sir Jonathan Ive late last year.
People who own the Apple TV box spend far more on content than those who merely own an iPhone or iPad, analysts say. In June, Apple said it sells more than 800,000 TV episodes and 350,000 movies every day on iTunes, a large portion of which is through Apple TV, generating upwards of $3m a day in revenue.
A substantial amount of that spending is believed to be from “cord cutters” who have used Apple TV to replace their cable subscription. But some analysts believe that Apple’s future is more likely to be working with the existing broadcasters and service providers than against them.
Mr Bajarin says that Apple could take the same partnership approach to TV that it did with AT&T for the iPhone.
“The Xbox One has convinced me that a very disruptive opportunity exists to become the one box for TV,” says Mr Bajarin, “and you don’t become the one box without doing a deal with the service providers”, because they still control direct access to their networks.
Apple could one-up Microsoft by striking such a deal with the lure of better technology and the opportunity for cable companies to sell more expensive services, he suggests, citing Apple’s recent talks with Time Warner.
But striking many of those deals across the patchwork of satellite and cable operators in the US and abroad would be a long-term task. One former Apple employee says the company believed taking that approach was too risky because it would rely on competitors’ networks for quality of service.
If Mr Jobs had indeed “cracked” how to sell an Apple TV through such networks, this person said, it would be on sale by now.
Perhaps PrimeSense and other deals can help Apple raise its game in the living room but for now, many watchers of the company still doubt its TV unicorn exists.
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