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Infinite Loop / The Apple Ecosystem

Rumors return of Apple’s Living Room Device to Rule Them All

Rumors that Apple could be working on a DVR and a networked HDTV are back. One …

Rumors of Apple graduating its self-professed Apple TV "hobby" into a DVR and releasing an HDTV with iTunes Store and DVR superpowers are swirling once again. This time it's Piper Jaffray stirring the pot, and the investment bank pulled out all the stops in justifying its prediction that change is coming to Apple's living room efforts as early as December 2009.

According to the report recounted by AppleInsider, Piper Jaffray's analysts predict that Apple will release a networked HDTV by 2011 with DVR and iTunes functionality built right in. Apple's recent five-year, $500 million partnership with LG was a big flag for this. Recorded shows could be synchronized with iTunes on a computer and, subsequently, to iPods and iPhones. The device could also replace most, if not all, of the other living room set top boxes by incorporating CableCARD, a Blu-Ray player, and speaker outputs.

Clearly, Piper Jaffray's analysts have never suffered through a breakdown of one of those TV-plus-DVD contraptions that are such wild hits with consumers.

Piper Jaffray believes Apple will begin paving the way for such a device by endowing the Apple TV with DVR capabilities by the end of 2009. Among the firm's rationale for such a move are comments from COO Tim Cook on Apple's Q1 2009 earnings call that Apple TV sales are up three times year-over-year, as well as Apple's recent DVR-related patent filings.

The firm also asserts that Apple would easily recoup "low-margin losses" from cannibalizing iTunes Store TV show and movie sales with Apple TV hardware sales, but this has been a constant point of contention around DVR functionality in Apple's products. Some argue that an Apple TV with a DVR would destroy iTunes Store video purchases. Others claim that one convenient, well-designed, and Apple-branded device that offers the choice between recording or purchasing TV programming would ultimately entice purchasers from both sides of the fence.

Either way, Apple has a number of difficult technical and political challenges to knock out if DVRs and �ber-media-HDTVs are indeed in the pipeline.

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22 Reader Comments

  1. I obviously can't speak for any other potential customers, but I'm unlikely to purchase either an Apple TV as it now exists or an Apple HDTV that incorporates a variety of functions beyond simple high-quality display. However, as my TiVo moves closer and closer to becoming more of a dynamic billboard selling my eyeballs to advertisers than the DVR for which I paid, I'm starting to hope Apple chooses to make a DVR. I've seen several of the cable/satellite/whatever-you-want-to-call-U-verse company DVRs and I've seen Windows MCE. Nothing I've seen has held a candle to TiVo's interface, and the comments from the users of those devices haven't left a very positive impression of their functionality and/or reliability. It seems like Apple might be the only company able to bring both the interface and functionality to the table to make an all-around better DVR than TiVo.
    1579 posts | registered
  2. I don't care about a DVR or any of those features. I care about an App Store. It wouldn't add any cost to the machine.

    Will it be as useful as the iPhone App Store? Of course not. But it will give ISV an outlet & market with which to be creative about the internet-TV combinations.

    Internet enabled TV as a concept is not developed at all. Give independents a platform to be creative with and who knows what experiences will be delivered.

    Also, a Hulu app anyone?
    89 posts | registered
  3. sergeantmudd, I like your Hulu comment.

    I have had an AppleTV for quite awhile and have been happy with the device, but there is room for improvement. As it is, I'm not willing to suggest friends/family to purchase one.

    The movie title availability needs to be improved. It is absurd that I have to wait 3-6 weeks to rent a movie on aTV that I could rent from the redbox at the end of the block for $1.00. Also, it is absurd that studios will pull titles from the device because 8 people in Alabama are watching Forest Gump on some TNN cable channel. There are also many titles that are not available, which does not raise my ire as much because of logistics and other issues I can understand.

    Hulu! <Insert your favorite flash based internet movie/episode website> This device should have a YouTube! like addition where we can use it to watch flash movie episodes. Even if you programmed the aTV to deliver an extra commercial where Apple/studios made some extra cash, then I would be ecstatic. 1-2 commercials a break that are not the repeitive trash of the recent never ending Pledge Dust Spray/Sprint Instinct would be great.

    Internet - Safari - I'm not as terribly excited about this as others, but it is a great addition that would make better use of the device.

    DVR - Sure, but don't give it to me in some packaged TV+aTV device. Why can't they just make a aTV DVR with HDTV tuner, Cablecard slot, and HDMI output? Sell it with a TV and you eliminate a large market of people that have already purchased a recent HDTV.
    227 posts | registered
  4. The AppleTV is in the same position as the iPhone before legal sales were opened up for the rest of the world.

    Not many countries have movies available and the 3x increase may be connected to the opening of the British and Canadian stores.
    I think it is the ability to sell and rent movies in other countries that is holding the AppleTV in 'hobby' limbo.
    170 posts | registered
  5. An SDK for the AppleTV is a no-brainer. I would be shocked if Apple isn't working on it already. Like the iPhone, I think they probably want to let the ATV mature a bit before releasing an SDK. I suspect by the end of the year we'll see a major ATV update which pushes it towards being a mainstream device and not just a hobby project.

    As far as cable goes... meh? The AppleTV is clearly a product for people who have little or no interest in linear TV. If you look at Tivo (the leader in consumer cable set tops) they are not really making much money on the business. There really isn't that big of a market for $200-$300 set tops that also require a monthly subscription fee. I don't see how Apple could turn a profit either without doing a monthly fee. Perhaps they could bundle unlimited iTunes in there too somehow. Either way I really disagree with the idea there's all this money on the table for Apple if they go into this market. I think they'd do alright but probably wouldn't make enough money to justify the R&D, long term support, etc. The vast majority of customers are content with the box their cable company provides for about the same price per month as a Tivo without the initial hardware cost.

    If Apple really wanted to go this route they should wait for Tru2Way when the playing field is a bit more level.
    2000 posts | registered
  6. I don't really want the integrated screen, but if you incorporate a DVR with Apple TV, then I'm buying one, and so are millions of others. Downloads may be the future, but I really want both capabilities in one device. If you ensure you have got great integration with Macs, iPhones, and iPods Touches, then no human would be without one. Imagine streaming your recorded or downloaded shows to your Wifi connected Touch or your 3G iPhone. Or, using those devices as super remotes with great interfaces and programming from anywhere capabilities? The Mac provides extra storage, editing, disk reader, and media hub for all your devices. I don't see why an ATV/Mac Mini combo device wouldn't be great too.

    You're talking the halo effects of all halo effects, having any one of these devices makes you yearn for having the others. If Apple does this in time for next holiday season, it will be the first step toward total world domination.
    12 posts | registered
  7. Having a DVR does not eliminate "On-Demand" content. Comcast has several free options on demand, and allows recording of the events on TV. Most of the stuff on OnDemand isn't available easily, or you may want to watch it, but won't be on any of the channels for a while. So, an Apple DVR with iTunes download ability would definitely have a huge impact.
    243 posts | registered
  8. Since my only choice for TV is satellite, I really could care less about them adding a tuner or DVR. 1080P is what I want, followed by an aTV app store.
    4595 posts | registered
  9. What I think a lot of people are forgetting here is that Apple create hardware that doesn't have national or regional specifications.

    Look at the iPhone - they went with GSM (not CDMA which is more widely available in the US) because it's used almost everywhere in the world. They have never offered FM radio in the iPod in spite of lots of requests which seems sensible as it's being phased out in most of Europe - a major market for the product. The same goes for XM or Sirius radio - why invest in something that will only appeal to a selection of users in one region?

    Now think about Apple TV, why would they add support for cable or satellite technology that varies widely from country to country. While they could conceivably create a cable or satellite solution that works in the USA, I doubt they could make it work in other countries without having many different models and that would be a supply line and manufacturing nightmare.

    In some countries such as the UK, there is simply no legal way to hook into satellite or cable services without using the provider's equipment making an Apple TV - DVR combo a physical impossibility.
    382 posts | registered
  10. Personally, I think integrating is absolutely the WRONG way to go for Apple. Perhaps they might integrate a TV tuner into the iMac, but integrating ANYTHING into a TV is a bad idea and dramatically limits market potentioal. A set top box is the target. One that works with sattelite, cable, and anteanna.

    I do expect a new AppleTV to come out. I expect it to be everything the current AppleTV is today but with a large HDD, Tru2Way support with dual tuner, and the ability to record video in 1080i or better and play back video over HDMI or DisplayPort in 1080p. I expect it to be an nVidia powered system, but likely not an Intel processor. I expect it will be a limited OS X experience, but web surfing would be enabled. A full iTunes store experience (possbily with a custom GUI). I also expect streaming support for NetFlix. I'd expect the hard disk internally to be used as a TimeCapsule, and also support additional external storage via eSATA and USB.

    I'd expect recorded video to be in H.264 and in some way encoded so it can only be played on FairPlay devices (since the recoded files would be easy to access, unlike existing DVRs, Apple's going to be forced to prevent them from being distributed across the internet by the media companies or the lawyers will never let this device see the light of day). I'd expoect recoded media would be easy to play on other local network computers and be easily transfered to registered iPods and iPhones.

    It will be Wireless N of course, with wired support as well. It will also likely have audio output support and be able to operate as a airtunes speaker. iPhone and Video iPod integration is possible, but more likely would be supported via a special cable and external dock that's optional. I doublt it will run much software at all beyond what it comes with, and perhaps games and small apps sold through the app store. It will be a fairly closed platform. I expect it would have support for an iSight camera and run iChat AV fairly well (likely using a bluetooth headset as a mic). I expect it to have some snazzy but simple wireless remote, require the seperate purchase of a wireless keyboard, but also be able to support iPod Touch and iPhone as a fully functional controls (including keyboard control) and that with proper set-up, you could configure recording using your iPhone from anywhere.

    Apple will have some legal challenges getting into the DVR market. unless they buy up a company, they'll likely have to partner with Happauge or a similar company to get the rights to recording software. Apple is coming to this game late and does not have the patents it would need to make this device without other companies supporting it. I guarantee TiVo won't join this party.

    I do not see Apple including Blu-Ray. That not only opens up too many legal questions when the device could be capable of recording the disks, but it would make the device (which I'd expect to be $400 already) far too expensive to be reasonable.

    There may be some significant partnerships between Apple and LG to market the device, potentially including LG making a TV that looks "apple-ish" and selling it as a combo in partnership with Apple. I'd expect such a TV to also include Display Port Mini as one of it's standard connectors.
    3243 posts | registered
  11. If apple is going to do a dvr cablecard is not the way to go. Cablecompanies are trying to do away with it. HEck if cablevision has anything to say about it dcas will be the standard not cablecards.
    276 posts | registered
  12. If there is any company that can deliver a "converged multimedia platform" that would work for the masses, it's Apple.
    3673 posts | registered
  13. quote:
    Originally posted by Zelannii:


    I also expect streaming support for NetFlix.

    Do you really think Apple is going to create and market a product that will only sell in the USA? I highly doubt they would ever do that.
    382 posts | registered
  14. Honestly, I'm hoping that they just merge aTV and the Mac Mini, perhaps just making the aTV interface available to all macs as a sort of upgrade to front-row. They could then add a Mini with an HDMI output, or perhaps more likely just give us/sell a cheap displayport to HDMI adapter (do they already do this?). The only hitch there is that they'd have to have a way to send audio along with video through the Displayport-HDMI cord, not sure if that's possible or not.

    They could introduce new upgraded Mini's at todays price point and essentially offer a slightly modified (probably adding the displayport and/or HDMI out, and maybe a slightly upgraded chipset?) version of today's Mini at a lower price point to replace the aTV.

    This seems to me to be the best way to be able to offer all of the features people want in aTV and streamline the product line. Want more storage in your aTV? Just hook a hard drive up to your Mini. If people want DVR functionality, I'm sure they could make some sort of external cablecard device that would hook up through a USB port (or preferably a FireWire port, as it'd be much faster, but sadly apple seems to be moving away from FW). Seems to me like there's really no need for a separate device to do all of this stuff, just let us run this software on our Macs, and offer a cheaper Mini, would help apple streamline their product line and would give everyone as much flexibility to do whatever they want.
    50 posts | registered
  15. Integrating a new consumer platform with a TV set is a horrible idea.
    Whoever put this nonsense forward should be ignored for at least a year for being a moron.

    And frankly, until Apple gets serious about making the appleTV a proper home media server, the rest of it is irrelevant. They're currently asking the consumer to shuffle in portions of their media collection from a PC. You can't sync your iPod from it. Rentals and purchases just muddles this caching picture and being a DVR would only exacerbate things further.

    They need to fix it before they expand it.
    468 posts | registered
  16. Apple will NOT manufacture HDTV's with ATV built in. There is no way that Apple thinks they'll be able to sell the combo for 10-20x the price of the ATV itself. As it is right now, any Component capable TV can use an ATV and the user doesn't have to shell out $1-2,000 to get the functionality. If you throw in the current trends in the US and Global Economy, it becomes ludicrous for anyone with half a brain to even consider it.

    I find it far more likely that they'll integrate HULU or It'll appease the Media companies, and they can get a cut of the add reveune generated. I could also see them lisencing the specification for the ATV to interested HDTV manufacturers to differentiate their product, but then the burden of actually moving units would rest on the HDTV company, not Apple.
    216 posts | registered
  17. quote:
    Originally posted by Roc Ingersol:
    Funny we heard much the same garbage about how moronic it would be for Apple to integrate iTunes into a telephone.

    This idea that Apple is going to make geeky home network admins out of consumers is perennially hilarious.
    10541 posts | registered
  18. What is this "TV" you speak of? The one living room device to rule them all is already here, and Apple sells it.
    12 posts | registered
  19. Not to rain on the parade, but the ISPs will never allow this to take off. Netflix, AppleTV, Hulu and their ilk are the reason that the major cable ISP's are implementing bandwidth caps.

    I can't wait to have ONE CHANNEL...that I program myself pulling from any and every source of content and can watch whenever I choose.

    My Roku was a paradigm shift.
    1827 posts | registered
  20. Make this work with Netflix play instantly and have it play DVDs (not Blu-Ray cause that's a bag o hurt) and I will buy it!
    690 posts | registered
  21. I'm not terribly interested in a DVR, but I'd buy an Apple branded HDTV with AppleTV capabilities in a heartbeat.
    61 posts | registered
  22. quote:
    Originally posted by Zelannii:
    Worked for iPod, worked for iPhone.
    Originally posted by e:leaf:
    I'm not terribly interested in a DVR
    I seriously doubt Apple is interested in it either. They are internet driven and the internet models of content delivery are downloads and streaming. They're extremely unlikely to include a competing delivery model on their platform. Besides, nobody makes money off of DVR and big content hates it.
    I suspect you're not the only one. Some people are assuming that an Apple HDTV would mean the end of AppleTV, which is of course, nonsense. AppleTV Take 3 might perhaps bring its own SDK, apps, and game store for widescreen hardware.
    10541 posts | registered

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