Apple TV - a step too far?

The re-launch of Apple TV generated hype and promised much. A re-brand, an Apple subscription service and an iPhone-style TV application store were among many things mooted, but what we ended up with was merely a smaller, less expensive version of the same box, with broadly the same content as was available on the first Apple TV.

Including TV episode rentals is a step forward, but we believe this will be a small market in the short term at least, as equivalent physical products are priced more aggressively. The inclusion of Netflix is of minor interest given that it is available on so many devices, and it is unlikely that Apple TV will ship with a Netflix-equivalent service in other markets, as no other provider has acquired as many streaming rights.

Consumers will be paying $US100 (about R730) for a box that does little but allow them to rent video content from Apple; a hard sell to anyone that is not a die-hard Apple fan.

Crowded market

Apple is entering a crowded market in bringing internet content to the TV, and at the moment its content offering stacks up very poorly compared to the likes of Sony's PlayStation 3 and connected TVs. In the long-run, the platform that dominates the connected home will be that which can build critical mass most quickly. The US$100 price point will help Apple with this, but it will be competing against devices like TVs and games consoles that consumers see as a primary component of their connected homes, rather than a secondary equivalent.

Apple is already the market leader in the online movies and TV, and the new Apple TV will only increase this stranglehold. But this is only a very small part of the future TV picture. It is clear that Apple could have the same galvanizing effect on TV applications as it has with mobile applications, and it may still do one day. But for now, this is clearly a step too far for the company, and as a result Apple TV today is a mere shadow of what an Apple set-top box and ecosystem could achieve in the future.