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Apple TV Doesn't Make Sense

There are new rumors about yet another Apple product -- not some variation on the tablet, but a TV. Not TV service, but a physical device to be released in 2011:

The system would include built-in digital video recorder (DVR) and home media functionality. Munster said such integration would let users sync recorded shows to Macs, iPhones and iPods over a wireless network.
This is supposed to be an expansion on Apple TV, a service that lets consumers listen and watch iTunes-delivered media as well as rent movies. Maybe I'm missing the obvious, but this doesn't make any sense to me for a few reasons:
  • Apple likes markets that are largely unexplored. Management wants to be able to create a product that doesn't have ready competitors. But unlike the MP3 player and the smartphone, televisions have been around a long time, and multiple vendors are including capability for online streaming HD video rental, to say nothing of incorporating Internet-delivered video.
  • Apple likes premium pricing. You can do that when you are creating a category (and I'd argue that the multi-touch interface smartphone is a new category). But when you're entering a pre-existing and well-established mature market which has become heavily price driven, that's tough to achieve.
  • Apple doesn't mind partnerships, but each side has to be able to bring something, and I don't see its grasp of the video market to be big enough yet to give it the edge it would want for negotiations.
  • Apple likes to control content. In the iPod, that meant creating a store for downloading music and a device that was compatible with only that source of content. For the iPhone, that has meant controlling the distribution of apps, because that was the content that made a difference. It certainly wasn't the phone calls, which you could do on anything. But for consumers to be interested in television sets in large enough numbers, they want access to their accustomed fare, and that's something that the studios and producers cannot hand over on an exclusive basis and remain in business. The time to nail down the seminal arrangements with them is long past.
  • Retailers like to get their fingers thoroughly in the pie, and they would want a good reason to bump out other manufacturers' offerings, particularly when those vendors are offering substantial discounts and quite often kicking in various forms of additional marketing money.
Maybe Apple is planning something, but it doesn't seem like it would be the best fit for the company.

Image via Flickr user james.thompson, CC 2.0.

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