“Apple’s decision to lower Apple TV’s price to $229 is eerily similar to Toshiba’s announcement on Monday that it’s lowering the price on its HD DVD players,” Phillip “Swanni” Swann writes for TVPredictions.com. “When you’re losing — and losing bad — you lower the price. And with Apple TV’s sales numbers to date, it’s been a loser.”
“However, even at $229, Apple TV will struggle to generate significant sales,” Swann writes.
“Americans have demonstrated that they have ‘set-top fatigue,’; their interest in buying yet another TV set-top is limited at best. Just ask Moviebeam, or even the retail division of TiVo,” Swann writes. “Set-top fatigue is one of the reasons why Blu-ray and HD DVD player sales have lagged as well; it’s not just the format war. Prices need to be lower to persuade consumers to give a new TV set-top service a chance, particularly in a down economy.”
“If Apple really wants Apple TV to succeed, $229 is a good start. And, adding the high-def movies is a no-brainer,” Swann writes. “But most consumers will decide that they can get those HD (and SD) movies from more convenient (and easier-to-use) sources such as cable’s Video on Demand, premium movie channels and your basic DVD player. (And, in time, even the Blu-ray players will be under $200, if not lower than that.)”
“Plus, they won’t have to invest in a new product that seems foreign to them, such as the Apple TV device,” Swann writes. “Consequently, I stick to my prediction that Apple TV will be a bust.”
Full article here.
MacDailyNews Take: The last we heard from the eerily unprescient “Swanni” was less than a month ago when he predicted that “Apple will dump Apple TV in 2008.”
Did Apple sound like they were dumping Apple TV today? Hello? Anyone?
Back in October 2005, soothsayer “Swanni” gazed into his occluded crystal ball and predicted that “‘The video iPod will be Steve Jobs’ folly.”
Smirk.
Apple TV is now more affordable. For free, Apple TV, including all 800,000 or so of them that are already out there in the hand of users, have instantly become more capable. Apple TV can now instantly rent HD movies from all of the major film studios with Dolby Digital 5.1 surround sound, now with no computer required. All of that on top of the already useful ability to bring TV shows, music, photos (now from .Mac and Flickr, too), podcasts, and YouTube videos to your television and/or home theater system.
The Apple Stores will drive consumer education and awareness for the device. Just as the video iPod was not Steve Jobs’ folly, Apple TV will not be a bust and Apple will not dump it in 2008.
Related articles:
TV analyst predicts Apple will dump Apple TV in 2008 – December 21, 2007
TV analyst says Apple TV will bomb – March 21, 2007
TV analyst says Apple’s video-capable iPod is a bust because he says so – May 03, 2006
TV analyst blows it, says Apple’s 12 million video downloads ‘a big disappointment’ – February 08, 2006
TV analyst’s uninformed prediction: ‘video iPod will be Steve Jobs’ folly’ – October 12, 2005
If the APPLETV is dead, then I want the bones!
After the presentation I am very happy to buy an APPLETV. To be able to lay in bed and just scan the itunes directory and select my favorite independent movie on demand is just priceless.
Sorry, but this is what I have been waiting for.
rw.
I think Swanni makes a valid point about set-top fatigue. Where do people turn after their Motorola DVR erases their hard drive during a firmware update? Consensus is that TiVO beats Moto / Comcast, but that’s after purchasing the box in addition to a monthly fee for access to a program guide. Or there’s the Panasonic HD / DVR, with all the nostalgic joy of manual programming. Along comes AppleTV. It’s not a DVR (yet), so for many people it’s a new video player on top of their existing recorder.
Apple’s movie rental policies should work well for a lot of people, but not for those who have their Netflix routine down. For $17 per month one can rent and possess three movies at a time. There is no waiting time for new DVD releases. There are no due dates or late fees. There are no per-movie rental fees. Shipping and handling are free. Returning movies is easy thanks to clever packaging. The Netflix website is fine for browsing, ordering and tracking rentals. And once the queue is loaded, it’s pretty easy to cycle through nine or ten first-run movies per month, with minimal restrictions, at half the cost of Apple SD rentals.
This is what Apple is going up against in the existing rental market. While Apple will do well against other download services, Netflix will keep winning as long a they can set the rules of the game. I do not see Apple giving up on Apple TV in 2008, but there’s gonna be some pretty intreresting discussions in the board room I’ll bet. Sky
So the price drop to the iPhone two months after it’s release was because it was losing, according to your logic? Errrr, wrong.
Creates demand, and this will be a great draw to those who are sick of an annoying format war in HD. I haven’t purchased either a dedicated Blu-ray or HD-DVD player in hopes that Apple would have a (legal) digital solution for HD. Viola TV Take 2! =)
Ha, I didn’t even skimp for the bargain HD player for the 360. I’m so glad I waited!
I think Swanni makes a valid point about set-top fatigue. Where do people turn after their Motorola DVR erases their hard drive during a firmware update? Consensus is that TiVO beats Moto / Comcast, but that’s after purchasing the box in addition to a monthly fee for access to a program guide. Or there’s the Panasonic HD / DVR, with all the nostalgic joy of manual programming. Along comes AppleTV. It’s not a DVR (yet), so for many people it’s a new video player on top of their existing recorder.
Apple’s movie rental policies should work well for a lot of people, but not for those who have their Netflix routine down. For $17 per month one can rent and possess three movies at a time. There is no waiting time for new DVD releases. There are no due dates or late fees. There are no per-movie rental fees. Shipping and handling are free. Returning movies is easy thanks to clever packaging. The Netflix website is fine for browsing, ordering and tracking rentals. And once the queue is loaded, it’s pretty easy to cycle through nine or ten first-run movies per month, with minimal restrictions, at half the cost of Apple SD rentals.
This is what Apple is going up against in the existing rental market. While Apple will do well against other download services, Netflix will keep winning as long a they can set the rules of the game. I do not see Apple giving up on Apple TV in 2008, but there’s gonna be some pretty intreresting discussions in the board room I’ll bet. Sky
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Sounds like alot of hastle to me.
Why mess around like that when you can just press one button on your Apple tv remote to rent and watch a movie that downloads instantly???
This is the very reason why Apple is succeeding where all other companies (including Netflix) fail… it’s called ‘user experience’.
I think it’s remarkable that Apple was able to get all the major movie content providers to agree to the conditions specified in the keynote announcement. That may have been to best accomplishment from MacWorld 2008.
For many customers, Apple’s per movie rental fee will work better than a set monthly fee for as many movies as viewing time and USPS delivery speed allows (a la NetFlix and Blockbusters). I used to have NetFlix. At first, it was fun, but it caused me a bit of stress because I often could not find time to watch the delivered movies in a timely manner, and then I felt a bit “cheated” because I wasn’t getting the most bang for the buck. Watching a movie should not feel like an ongoing “job” (unless you happen to be a movie critic).
So with Apple’s service, I can watch when I want to watch, and pay a reasonable fee. And I can choose only things I REALLY want to watch… After “force-feeding” ten movies per month for a while, it became difficult to find quality stuff to put on my NetFlix queue.
I noticed one odd detail, if I’m interpreting the keynote details correctly. It seems like you can rent HD using an Apple TV, but you can only rent “regular” DVD-quality if using iTunes Store on a computer. Is that right?
@ken1w
You can rent regular movies via Apple TV as well as HD. It just presents one or two buttons to choose which format you are after. Either Rent Movie or Rent HD Movie.
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Regarding this swanni and all the rest of the critics, clearly they cannot do their sums. lets see now $300 x 800,000 = $240 million revenue. And this for a product with no real marketing effort. That does not sound like a flop to me. That is an amount of money that cannot be ignored no matter how big your corporation is.
Apple TV is now the product that it should have been when it was released. The real big difference is not anything that Apple has doen with the Take 2 but the changing minds of the studios. Without their support any device like this is pissing in the wind.
Finally they are beginning to ge the new media landscape that Apple have been developing products for all this time.
Apple TV and its inevitable successors are the future of media delivering into and around the house.
This drives a bus through the BRD vs HDDVD debate as now I can rent a HD film from any studio and watch it at how and not bother with buying a next-gen disk player and use that money for a better HDTV.
TV is not like an iPod or other personal device. It’s sort of a me-too category. It offers nothing earth shatteringly unique, though the convenience factor is quite something. I would rent through iTunes, but not really want to through my cable company because I feel ripped off by them already.
It’s a wait and see game here, but no one in their right mind would expect these things to fly off the shelves yet. I might get one and experiment– dump my cable connection and subscribe to the couple of shows I like, watch a movie here and there, and rediscover time AWAY from the tv again. And maybe that’s it– a la carte tv has its appeal and may be this product’s unique weapon.
It’s correct that the major appeal of Apple TV is another VOD service. I have Verizon FIOS TV and there are many flaws with their VOD system, but the biggest one is: NO HD CONTENT.
Apple has just taken the lead with their VOD offerings because of HD content. The winner in the race to provide VOD is about content, content, content….and a little about ease of use, which Apple will certainly win.
I knew as soon as Apple said they were lowering the price people would start saying its a bust, look see they are lowering the price because its a bust.
Nothing they do is a win for the glass half empty people.
Add a TV tuner, TIVO capabilities, and Blu-Ray at about the price it is today…
Then Apple will move lots of them.
I see no need to buy a Blue-ray player now.
I think I will drop all of my premium channels. Maybe not HBO!
I still much prefer Blu-ray on my PS3 to what the Apple TV offers, but it’s nice to have the option for rentals there from Apple as well. I’ll continue to use the Apple TV for music, photos, and the occasional TV show purchase, but I’ll rarely ever use it to rent movies. And my movie buying will be exclusively on Blu-ray.
Too many gadgets for the TV—-stop!!!
@ fenman
> You can rent regular movies via Apple TV as well as HD. It just presents one or two buttons to choose which format you are after. Either Rent Movie or Rent HD Movie.
You misunderstood my question. From the keynote, I know that you can rent both regular DVD and HD resolution movies from Apple TV. But it seems like you can only rent regular DVD quality movies if you are using iTunes on a computer. Am I wrong, or is this correct?
I think Apple missed the boat on this one. I have a mail in subscription to Blockbuster. It’s great. For $15 bucks a month I can have 2 DVD’s at a time and when I am done with one, I run by the store and pick another one up. The system is fantastic. I can normally go through a lot of discs in a month. Turn around for the mail is about 2 days. So I almost always have a move. Add that onto the Online Streaming of TV shows and I I haven’t payed for cable since I left college. Haven’t missed it a bit.
Now flip that over to Apple. It’s almost like they are stuck in 2003 here. $4.99 for a rental? I haven’t payed that for a rental in over a year. I’m not going back to paying per rental. I’m really disappointed with Apple here.
Until I can have a subscription where I pay for Unlimited downloads per month, AppleTV still blows.
I have set top fatigue. I’m sick of paying Comcast $50 a month for their box and two hundred channels I don’t watch. Apple TV now appears to be a viable alternative. And the price is right. My only problem: Apple TV doesn’t work well on analog sets (or so I’ve heard). If not for this last bit, I’d buy one right now.
You guys begging for another monthly bill really need to get lives. Take more walks. Make more friends. Go volunteer somewhere.
No no, I want to replace a monthly bill. I replaced a cable bill with Blockbuster. I would like to replace Blockbuster with AppleTV, (ATV could be more convenient) but Blockbuster is the better deal.
Quick question – when not watching TV, is it possible to stream music from iTunes to the AppleTV for output through a hifi system, like you do with an AirTunes?
That would be nice but I’m pretty sure it doesn’t (but I can’t say for certain). It would need to be a WiFi hub, and if it were, I think Apple would have touted that feature like it does with Time Capsule.
A TV Analyst, so that means he went to college to get a degree in watching TV? Boy a real expert, what he writes must be true if its on the internet, and they would never let him tell lie on line. The sad part is he gets payed for his drivel.
@ dallas
> I think Apple missed the boat on this one. I have a mail in subscription to Blockbuster. It’s great. For $15 bucks a month I can have 2 DVD’s at a time and when I am done with one, I run by the store and pick another one up.
For customers who can consistently watch 8 or movies per month, the NetFlix and Blockbuster deals are great. If the number is more like 2 or 3, and sometimes none, Apple’s service makes sense. Also, I think Apple current offering was limited by the current agreement with the studios. It’s obvious Apple had to compromise to get all the majors to play ball from Day One. The 30-day delay from DVD release is an obvious studio-imposed limitation, and pricing is probably another. It’s even possible that Apple would have offered a flat-rate monthly fee plan for up to X movies, but that was not allowed by the “consensus” of studios.
What Apple got from the studios are not the best terms, but Apple can make it work doing what it does best. Making the user’s experience fun, elegant, and convenient. For the subsequent round of negotiations with the studios, Apple will have more clout and demand better terms… just like with music.
The pundidiot doesn’t get it. With OS X as its brain, Apple TV can be anything that its hardware can support. Features and policies that get in the way of an Apple TV living room takeover are a software upgrade away. Those who fail to take this into account are doomed to spewing stupidity into their alternate universe.
OS X is the key to almost all Apple products. No competitor comes even close to matching its capabilities or ease of use as a development platform. And as Moore’s Law works its magic, over time OS X will be the common thread behind all of Apple’s major products.
Pundits: their stupidity is our AAPL buying opportunity.
The other thing that they should add to the Apple TV is to add an email function. I think that for all the grandmas out there would really appreciate it. And the ability to get photocasts and store your own digital pictures on it. It would be cheaper than buying a computer and since it is on the tv, it would be less intimidating…
Things I hate about Cable VOD:
too few selections, esp. in HD
clunky user interface for making those selections
Things I love about Netflix:
lots and lots of selections
great queue management software
Things I hope to love about AppleTV movies:
selection in HD
great UI