Apple's Approach

We've seen Microsoft's approach, but what about its biggest threats?  A few pieces of the Sony puzzle have been unveiled over the previous months, although honestly it doesn't seem very well assembled at this point.  The PlayStation 3 does have an online service, but it isn't what Xbox Live is (not yet at least).  We previewed Sony's Bravia Internet Video Link in our earlier CES coverage, but the device is fairly limited in the type of content you can stream to your TV - only allowing selected content from a handful of web portals. 

Given the pressure Apple has put on Microsoft (not with marketshare, but with featureset), it isn't surprising to see competition from the industrial designers in Cupertino.  The goal again is to be able to stream content from your computer, in this case a Mac, to virtually any other device in the home - starting with the TV. 

Apple already has the MP3 player market with its iPod, which can play both audio and video content.  And the recently introduced iPhone addresses much of the same market as the iPhone in terms of being able to take your content with you wherever you go.  Apple's main limitation however is that it has no competitor to Microsoft's Media Center, television in its conventional form remains untapped for the company.  Thus Apple's strategy has to change a bit and instead of attempting to produce a product that will record and archive cable TV broadcasts, Apple leveraged one of its most successful products to date: the iTunes Store. 

For Apple, the iTS is the closest thing it has to an IPTV network; you can download the TV shows and movies you want and watch them on your Mac or iPod.  Obviously there are limitations, as not every show you want to watch is available in the iTS and you don't get to download the shows the minute they air, but it's the only option for Apple currently.  You could even view Apple's iTS as the first DRM enabled (aka legal) a la carte cable solution, that just happens to be available over the Internet.  In theory if all you watched were a handful of shows, that were all available on the iTS then you wouldn't need cable, just pay for the shows you watch and you're set.

While we're not sure about the number of users that actually use the iTS as a cable TV replacement, it's clearly a big part of Apple's vision and the only way it can compete as you're not going to see an Apple IPTV solution anytime soon.  The problem is that until now, there's been no good way of getting all of this content you've bought off the iTS onto your TV.  Enter Apple TV.

The Apple TV product is designed to bridge the last gap between your content and your TV, taking content stored on your Mac and streaming it to your TV. It's Apple's entry into the living room, as it doesn't have a gaming console or other device that naturally resides there like Microsoft at this point.

Apple TV is merely Apple's attempt at a digital media extender, similar to what we've seen from so many other companies. The difference here is that Apple not only makes the hardware, but also provides the software and service that people use to obtain the content being streamed. As such Apple TV appears to be best tailored to Mac or PC users that happen to get a lot of their audio and video content off of iTunes. The unit itself is limited in the type of content it will decode, and pirated DivX movies aren't on the short list; as such, Apple TV's success will be among a very particular group of users.

We wouldn't expect the growth rate of Apple's TV product to be incredibly fast and without support from the enthusiast community (which would undoubtedly support a product if it offered greater flexibility in what sort of content it would stream), we're not sure where the product will end up in the long term. Apple does have a long list of products that were good ideas but never grew to iPod popularity levels, and at least in its first iteration the Apple TV may be no different. Long term success aside, looking at Apple TV as a piece of the larger digital home puzzle you can see that Apple recognizes the same thing Microsoft does - it needs a box in the living room and it needs a way of getting content from your PC (or Mac in this case) to that box.

TV is Changing The Issue with All Approaches
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  • Rock Hydra - Wednesday, January 17, 2007 - link

    quote:

    Apple ... buy Nintendo


    I hope not.
  • archcommus - Tuesday, January 16, 2007 - link

    The article speaks largely about waiting for a company to do convergence perfectly, to combine the PC and TV seamlessly and easily. Am I missing something here or can I do this all on my own very easily? I don't own my own home, but if I did, I would have a server PC with all of my content, PCs in each room, a PC powering each TV (or monitor, same difference really), with gigabit ethernet connecting it all. Each PC powering a TV would of course have a tuner card installed and PVR software like SageTV. Bingo - every TV in my house can now watch live TV, function as a PVR/TiVo-like device, and also view content stored on any PC in my home since they're all on one LAN. I can also play my music, view my photos, and even browse the internet if I wanted at any TV in the house.

    There. Did I just solve the problem? :P I'm kidding of course, I just don't get what I'm missing here.
  • Wellsoul2 - Thursday, January 18, 2007 - link

    IPTV-But you've got to pay..same old same old.

    Right now my cable is connected to my computer and I get over the air HDTV.
    My computer does DVR..all this with a cheap tuner card.

    Seems pretty lame to use an XBOX when you have a PC that can adjust the
    picture etc and play videos from Yahoo already.
    My TV is my second monitor already.

    Itunes downloaded stuff is ok for tv shows..movies are pricy.
  • Araemo - Tuesday, January 16, 2007 - link

    "The real question is whether or not AMD will be able to put enough resources behind DTX to make it a widely accepted industry standard."

    You know, they really might not have to. Why? Same reason ATX actually caught on: Cases can be built VERY EASILY to support both DTX and ATX, or Mini-ITX and DTX.. allowing case manufacturers to hop on board for almost no cost.

    Motherboard manufacturers don't even have to wait for the cases to be available, since the DTX boards will fit on ATX cases... So I'd expect, if AMD doesn't piss anyone off, and makes nice with ASUS and the other tier-1 mobo manufacturers... smaller DTX boards might replace mini-ATX if they have any significant improvements. (What I'm trying to say is: What is the risk if ASUS makes their tiny board with only one PCI slot DTX or mini-ATX? There should be none, if the board was already designed to be that cheap and restricted for low costs... The board will still work in ATX cases so they can advertise it as dual compatibility.)
  • RogueSpear - Tuesday, January 16, 2007 - link

    I DVR just about everything that I watch. With the amount of money I throw at Time Warner I feel justified in blowing past all of the commercials, plus I like to watch things when it's convenient to me. So can I keep on playing a game at full speed (or for that matter at all) while this thing is recording one or two HD streams? Or do I need to put the controller down because it's time to record The Office?
  • glennpratt - Tuesday, January 16, 2007 - link

    Divx != Pirated; and vise versa Anand. I get the point, but that mentality doesn't help.

    If only it were easy to encode every movie and TV show I own or have recorded to a decent format and have everybody play it. But no! Movie companies want to throw a wrench in the works and software developers want to divide up the broken works into sovereign territories.
  • PrinceGaz - Tuesday, January 16, 2007 - link

    In fact these days most pirated content is encoded with XviD rather than DivX. Admittedly there isn't really much difference between them as they are both implementations of MPEG4 ASP, and on a computer you can play back DivX encoded files using the XviD decoder and vice-versa.
  • mino - Tuesday, January 16, 2007 - link

    Well, for the most part, I do NOT play the movies I bought! I just encode the to some high-quality XviD, put on home NAS and then play whenever I want (without all of the commercials and other things I paid for while not eanting them).

    AFAIK most friend do it this way so I really see no reason for going DRM...

    However that DTX thingie seems sweet. Especially combined with Fusion...
  • Goty - Tuesday, January 16, 2007 - link

    If you look at the placement of the northbridge relative to the memory slots (find pictures elsewhere on the web for a full shot of the board), the CPU socket sits right between the two. What does this mean? This means that there's pretty much no way that this form factor will work with any CPU that doesn't utilize and onboard memory controller, i.e. this pretty much leaves Intel out of it.
  • Araemo - Tuesday, January 16, 2007 - link

    Besides the fact that you can probably relocate both mobo and northbridge if your northbridge is your memory controller - Intel is moving to an on-die memory controller too, so that is fairly forward-thinking.

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