Analyst: Apple ‘s iTunes+iPod+iTV model ‘the gold standard for the digital home of the future’

“After months of speculation, Apple Computer finally rolled out their iTunes Movie store as well as new iPods and, perhaps even more importantly, their own version of Microsoft’s Media Center PC architecture currently code named iTV,” Tim Bajarin writes for Technology Pundits.

Bajarin writes, “Of course, the movie store has gotten all of the attention and even though Apple rolled it out with just Disney, within a short time the other studios will have to follow suit just to be competitive. How long will the other studios hold out and just let Disney get all of the new movie downloads for themselves? I bet not for long. The original iTunes TV store started only with one company, Disney, but within 12 months 40 other networks have signed on and any network not on iTunes is left in the digital dust.
Jobs’ deal with Disney will set the tone for digital download movie pricing as well.”

“New releases will come out on iTunes the same day they roll out on DVD. But it is the pricing that is important. For example, Car’s, a Disney Pixar movie, will come out on Nov 7th and will be offered for $12.99 for the first week and then $14.99 after that. And library films like Good Will Hunting will be just $9.99,” Bajarin writes.

“Another thing that sets Apple apart is their integration of the movie store into iTunes and the amazing user interface they have that amplifies the music and movie store in this new version of iTunes, version 7. Take a look at Amazon’s movie store and then look closely at Apple’s. You will immediately understand that Apple knows how to do software and Amazon does not! Apple not only has the edge on current movie download sites, but its approach to providing a complete digital eco-system in which the OS, devices and store are tightly integrated makes them hard to beat,” Bajarin writes.

Bajarin writes, “The other big news was their technology demo of iTV. This box that sits next to the TV will allow all content from a Mac to be displayed on a TV in DVD quality resolution. Although it will not come to market until Q1 2007, Apples preview of this product is highly disruptive to the market and makes Microsoft’s own Media Center PC seem old-fashioned in comparison. Apple will not explain the technology behind it, but clearly the have applied a new UI along with some serious compression and high speed wireless technology in order to deliver video, images and music to a TV screen at this level of quality.”

“In the end, the way people manage and access especially the downloaded TV and movie content via this iTV /iTunes model will become the standard in which all other similar media adaptor schemes, devices and services will be compared to in the future,” Bajarin writes. “Bottom line is that Apple has delivered the better PC-to-TV media experience and with their integrated approach to even extending that personal content to iPods, the Car, etc, Apple becomes the gold standard for what the digital home of the future could look like in the coming years.”

Full article here.

Related articles:
The Motley Fool’s Lomax: Apple news ‘mostly underwhelming, with some potential future bright spots’ – September 12, 2006
Analyst: Apple ‘s iTunes+iPod+iTV ‘will be hard for other players to match’ – September 12, 2006
Apple gives sneak peek of ‘iTV’ set-top box to debut Q1 2007 (with images) – September 12, 2006
Apple posts new iPod nano ad online – September 12, 2006
Apple’s QuickTime stream of Steve Jobs special event now live – September 12, 2006
Apple’s iTunes 7 installer shows ‘iTunes Phone Driver’ as greyed-out option – September 12, 2006
NFL and Apple team up to offer 2006 NFL game highlights via iTunes Store – September 12, 2006
Apple debuts iTunes 7 – September 12, 2006
Apple debuts new iPod in 30GB and 80GB with Hollywood movies, games and new lower price – September 12, 2006
Apple unveils new iPod shuffle: world’s smallest digital music player – September 12, 2006
Apple intros new iPod nano with new aluminum design in five colors and 24-hour battery life – September 12, 2006

41 Comments

  1. ” some serious compression “

    You don’t have to compress MPEG-2 to stream it over 802.11 (at least g – I do it all the time from my MBP to my Xbox), so you sure as heck don’t need to compress the iTunes MPEG-4 downloads.

    To put it another way, MPEG-2, 4 etc are already sufficiently compressed to stream wirelessly.

  2. “Why would anyone want to watch 640×480 on a big flat screen tv. Sorry Steve, I’d rather by the DVD or rent it and watch it less compressed.”

    Sorry, but you’re overlooking several important points here. One, while 640×480 is less resolution than the resolution of a DVD, you have to realize that DVD images are themselves compressed using the ancient MPEG-2 codec.

    Presumably, videos bought on iTMS will be encoded in h.264 which will offer much higher quality, i.e. less compression artifacts. Testing will be necessary, but the quality issue may turn out to be a non-issue as a result.

    Secondly, no DVD today even meets the 720p HDTV standard. TVs and DVD palyers will upconvert the relatively low-resolution DVD image to 720p, 1080i, and even 1080p. The chips that do the upconversion are pretty good these days so again, the 640×480 resolution may be a non-issue with a good quality HDTV or receiver with upconvert capability. It could be that the iTV itself will do upconversion.

    So complaining about the resolution of iTMS movies at this point is a little premature. People need to focus on the fact that Mac + iPod + iTV totally wipes out Microsoft’s strategy to enter the living room via Windows Media PCs.

    As of today, the Windows MPC is dead….Microsoft and the MPC makers just won’t know it until the iTV starts shipping.

  3. I don’t get why Apple don’t build the Movie service around a rental model – especially after the comments Steve Jobs has made in the past about customers different uses of music and film (I wonder if his heart is REALLY in this current venture?).

    I believe Apple would sell at least 20 ‘rental’ licences of a movie for every single ‘bought’ one. And if the price difference is, say, $4 to $12, Apple would be raking in a fortune with a service primarily (but not exclusively) focused on this model. It would attract MASSIVE ‘impulse’ use – how often does anyone flip though the TV channels to find nothing of interest and who would – without hesitation – choose a cheap movie as an alternative for the evening? I would do it very often and think of it as great value.

    I think Apple is making a big mistake here – against their better judgement. It would be a shame, as the technology advances and movie studios become accustomed to online delivery, if another company jumped in with a VERY attractive rental-based product that leaves Apple looking as heavy-footed as Amazon do.

    BTW – the iTV box looks to be somewhat larger than the Mac mini.

    MW: ‘SALES’ – freaky!!

  4. I think the rental model might have potential, but I think Jobs decided it’s too much trouble to offer such at this time. With rentals, you have to deal with a host of issues that a simple “buy to keep” download avoids. You have to worry about how long the rental is good for, the mechanics of how a rental expires, what to do with a file after it expires, how to limit viewing, etc.

    For example, a big question about Amazon’s Unbox service is that when you download a rental, Unbox will actually delete the file off your hard drive after the rental period has expired.

    Think about how scary that is, to give permission to software that can selectively delete files on your hard drive, remotely.

    Besides, rentals of new movies at Blockbuster isn’t exactly cheap these days. I think a lot of people will be willing to pony up $9.99 for a movie they can keep, as opposed to paying $5 to rent something that will expire or must view within 24 hours of starting.

    It’s all about simplicity.

  5. BTW – the iTV box looks to be somewhat larger than the Mac mini.
    Would fit great if they make the mini big enough to house a 3.5″ drive which would be the logical thing to do if you are to house movies on it. Also, probably nothing but the ethernet plugs in about the same place on the mini so running a 4″ ethernet cable between the mini and iTV wouldn’t be a hassle.

  6. I’ve been reading comments from a lot of people on various sites (tech related) who are panning iTV because it isn’t some whizz bang system that does everything windows media center attempts to but for cheaper and with some amazing interface which does every piddling little thing they’ve ever wanted without actually copying the idea of media center in any fashion. Some have gone so far as to say that it will be a ripoff considering you can cobble a solution together using a second hand xbox or something. The xbox thing amuses me because you don’t see these people using the same logic in terms of an actual xbox – why buy a new one when it’s gonna be cheaper second hand? I know apple gear holds value but I’m pretty sure that getting one of these second hand will at some point be cheaper than a new one.

    What a lot of technically minded people don’t seem to get is that sure, some sort of integrated system which allowed us to record and play all forms of media from one central point, on any device we want would be great. It’s not happening yet. The technology isn’t there and neither is the public. Any computer based media needs to be as simple as a dvd player – moreso. You need to plug it in, turn it on and press play. Choices should be simple and clear. Once this sort of thing becomes the norm we’ll see far more take-up in terms of features and integration with the computer as a whole. Media Center tried to do everything and failed, I admit it seems to have improved but it’s not something your average joe would even consider. iTV might be.

  7. I do remember once seeing a media centre PC that was the same size as a video recorder (rember them?), manufactured by Elonex, I think.

    The form factor looked good, but the windows interface on it seemed very clunky. And the price at the time was quite steep from what I can remember.

    This product iTV or whatever it will be called is aimed squarely at the mass market. As M.X.N.T.4.1 pointed out, these devices have to just plug in and work with whatever you have:

    Mac users will expect this any way
    PC Users – don’t they have enough to worry about already.

    I love front row. I think it perfectly balances ease of use and accessibility to content. Sure the apple remote is a little clinically stripped to the bare minimum on button count, but I think the sentiment behind doing this was correct.

    Clearly there are still some unansvered questions about movie downloads (quality, and title quantity) but these will mature in time.

    I like the fact that this is no video only, but will also allow me to connect itunes to home speakers, and control the playlist on the television. I like the fact that photographs can be shared with friends and familly on the sofa….

    And it does all this from one source with limited configuration using a beautiful, intuitive interface – whether the back end is a PC or MAc. Priceless

    I can see there are a lot of upsides to this little box, and I can’t even get content yet (I live in the UK).

    I look forward to seeing the final product in Jan-Mar next year.

  8. Scenario:

    You are at home with your significant other late at night – one has to work, one wants to watch a movie. One works (MS Word document, lets say) in the study/home office whilst the other sits on the couch in the loung.

    Am I correct in thinking that in this scenario, you would need 2 PC’s – one in the study and one in the lounge to let you download and watch the movie? Would an Xbox 360 “media head” work in this situation connecting back to a PC doing the download?

    From what I understand – Come next quarter, Apple will allow this by having an iMac in the study (connected to internet) and the “iTV” in the lounge.

    If this is true, can’t help but feel Apple is good value?

  9. New Type. I was going to post but you hit it right on the head. I guess you beat me to the coffee this morning.

    Apple. One step at a time to owning the digital home. Its coming, but at Apples speed. Darn, I wanted it all, yesterday. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    But yea, you pretty much got it all. “Just one more thing!”.. Has anyone noticed that: Apple is putting it all together (all that is important anyway) and making it SUPER SIMPLE AND EASY. Its easier than programming a VCR. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> And all the formats match. Learn to use one thing and you can use them all. The average person is no techno geek. They can do it on a Mac. They can NOT do it on a PC. Just too complicated.

    Microsoft sells to techno geeks. Except in business, there are just not that many sales to techno geeks. People want it easy and —- wait for it—– for it to JUST WORK.

    Hey, got to go.

    N.

  10. To answere Dr. MCR’s question, I have a Media Center PC and an XBox in the living room. The two are connected by “extender” software. I can be working on the PC while my wife watches recorded shows in the other room. Works great. While the iTV sounds interesting, until they incorporate some DVR funtionality, my current set up works great.

  11. Thanks Joe,

    Is the extender software easy to setup? I take it that this works over wirelsss networking. How do you access the content from the Xbox – is there an easy interface?

    I thought about this, and you could in theory connect up the Mac in the study to a TV aerial (using an elgato device or similar) introducing PVR functionality to the Mac. This does add an extra layer of complexity and cost, and would need extra thought for countries that do not provide terrestrial television.

  12. Dr. Mcr,

    The extender software, which needs to be purchased seperately for around $25 online, comes on a CD that you insert into the XBox (the 360 has it built in) and it automatically connects to the Media Cetner (which does need to be turned on). You use the remote to control the MCE interface and it automatically searhces for any music, photos, or videos, in aditon to recroded TV. It also allows me to use it like a Tivo and can pause live tv.

    If Apple had this capability last year, I might not have purchased a Media Center, but since I had an Xbox, it was an easy decision. I had thought of upgrading my other computer (a Mac) but this was pre-intel and would have had to have crafted some sort of arrangement, as you proposed to get it, to work. Having the Xbox already made my purchase pretty clear and I propably could not have gotten my wife’s consent if I needed to spend a bunch of money in addition to a new computer to get the same functionality.

    Glad to help

  13. This iTV box really needs two HDMi ports, rather than just the one.

    Think back to when VCRs and TVs had just one SCART socket!

    People will need more ports to connect not just the HD TV to, but their HD games consoles (XBOX360/Playstation3’s) or anything else introduced in the future that needs a HDMi port (Video cameras?)

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