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In the on-again, off-again online chatter about the Apple TV, two things are certain: First, it's treated like the bastard stepchild of Apple (Nasdaq: AAPL) hardware; and second, that doesn't make it a failure. A third thing is much less certain: Whether the Apple TV is a placeholder for a real Apple TV.
Let me explain.
First, various industry experts have been predicting for years that Apple would eventually produce an all-in-one Apple TV unit -- the screen, the hardware, the software. Basically, glue an Apple TV (the real kind that you can find in stores right now) to the back of a flat-screen TV and integrate the remote.
The latest prediction came earlier this week, courtesy of a widely reported research note from Piper Jaffray's Apple-focused analyst Gene Munster. He noted that the aging 40 GB Apple TV is now shipping in 1 to 2 weeks from the Apple online store. Previously, there's never been a shipping delay. This could be due to a pending update to the Apple TV, or at least a price change and a bigger hard drive option, or it could perhaps even signal a new subscription content service. But when? Maybe next week, during Apple's Sept. 9 iTunes/iPod/Music announcement.
Apple's invitation to media, however, features a silhouette of a woman listening to an iPod with the tag line, "It's only rock and roll, but we like it." The latest presumption is that it implies next week's announcement will be only related to music. The Loop's Jim Dalrymple reported that "very reliable sources" confirmed that there would be no Apple TV update next week.
Either way, it's been more than two years since there's been any significant hardware update, though Apple has released a few software updates from time to time.
So what about the Apple TV? CEO Steve Jobs once famously dismissed it as a "hobby," but Apple lovin' fans tend not to believe him. In financial reports to Wall Street, Apple is noncommittal about the product, and writers and analysts who tend to have beefs with Apple or affiliations with other companies have a tendency to note it as an example of an Apple failure, most usually in passing when they're talking about something else, like a possible Apple tablet device or some other HDTV extender or similar media device that's been released by another company.
I bought an Apple TV from day one, and I can't imagine living without it -- so if it hasn't been clear yet, I'm a big fan of the device.
Why Is the Apple TV Hobbled?
The Apple TV an astoundingly easy-to-use and powerful HDTV extender device ... and yet it's irritatingly hobbled at the same time. It links seamlessly to iTunes, lets you buy and rent movies and TV shows online via iTunes or the Apple TV device itself, and it lets you move those movies to and from iPods and iPhones for your viewing pleasure. You can even watch video in 720p HD, which upscales surprisingly well on 1080p HDTVs, and the standard definition content is very watchable, too. It's not as good as Blu-ray, of course, but the Apple TV and iTunes ecosystem is much more portable than Blu-ray and DVDs. It's all about convenience.
While we're talking video, there are also a lot of free podcasts, video podcasts, and university-quality lectures ready to run on the Apple TV. The point: There's plenty of available high-quality content.
Meanwhile, the Apple TV does a superb job of showing off photos. It syncs automatically with iPhoto, and when you add new photos to iPhoto, the Apple TV will wirelessly snag them and have them ready for viewing. The built-in slide show options are slick, and while most newer HDTVs have SD card slots that will let you pop in and display photos, the Apple TV has a hard drive that will hold thousands of high-quality photos -- and in my experience, tends to create a more pleasing slide show, too.
And there's music. It's easy to listen to tunes, which can be hooked up to your home theater speaker system, and let a photo slideshow run at the same time. Nice. Instead of snapshots that are taken and lost to some computer hard drive (because, really, who's printing them out and putting them in albums these days?), they show up for the viewing pleasure of friends and family. Besides, your photos -- at least, my photos -- have a tendency to remind me what's really important about life. Once you try making your slide shows ubiquitous in the your daily life, you'll understand what I mean.
It also lets you view YouTube videos or MobileMe or Flickr galleries, but it doesn't let you access other streaming video Web sites, run a browser, or let you check your email. It's not a home theater PC, just this weird box in the middle, and I think that's why it gets flack. Of course, you can hack it to run apps like Boxee (I did) but the Apple TV's processor really doesn't have enough get-up-and-go to make me happy running Boxee. And when Hulu took its ball and went home, I gave up on it.
Pesky Rights
There's also a tendency to criticize the limitations the Apple TV as if they were Apple's limitations -- and this happens to other devices, too. Take, for instance, the fact that users can only rent movies for a 24-hour period after they start watching them. This is not Apple's limitation; this is a movie industry rights management limitation. Want to rent a movie on-demand from Dish Network? Same rules apply.
So what about a Web browser that could run Flash or Silverlight and let you stream online video content to your HDTV? Here's an area where Apple seems disinclined to play ball -- assuming the Apple TV hardware components are capable of delivering a long-term joyful experience, online streaming lets consumers leave Apple's iTunes playground. I'm sure Apple isn't interested in that.
Of course, online streaming would mean that Internet service delivery problems or cable ISP traffic throttling could create a bad user experience for Apple TV owners, who might blame the device and not their carrier. (In-home streaming over your WiFi network is excellent, by the way -- the quality is great and I've never had a hiccup.)
So Where Does That Leave Us Today?
The Apple TV enjoys what I would call a healthy enthusiast community of users who've hacked and upgraded the hard drives in their devices. Google (Nasdaq: GOOG) "Apple TV hack" and you'll see what I mean. In fact, I've got a 40 GB Apple TV, and it's full of photos and music, with a little room left over for video rentals now and again. This weekend I'll be tearing it apart and following a disconcerting number of steps to upgrade its hard drive to 120 GB. My warranty expired ages ago, and while I might screw it up, it's worth the risk.
Meanwhile, Apple may be caught between a rock and a hard place. An upgraded model capable of browsing the Web would let consumers bypass iTunes purchases, and if it came with a nice keyboard option, it could replace some Macs in the home. If Apple could navigate the byzantine digital rights issues with movie studios and production companies and offer a subscription solution to content, the Apple TV could take off and be more profitable than via a simple hardware margin.
Regardless, it's really clear that Apple is a consumer-focused company and has made billions on selling media, and where's the next generation of convergence? The living and in mobile devices. So somehow, some way, Apple is going to ensure that it has a solution that plays well with HDTVs ... and at some point, when the manufacturing costs and content management rights issues converge in a way that makes sense, Apple will just build its own all-in-one Apple TV.
So is the current Apple TV a failure? Hardly. It's making guys like me happy every day. And for everyone else, it's taking up mindshare, waiting in the shadows until the time is right for Apple reinvent it.
