AirPlay’s hidden agenda: Apple TV sets

“Steve Jobs may have found a way to get TV makers to put Apple’s technology in their sets,” Philip Elmer-DeWitt reports for Fortune. “Apple is talking to television makers about building a new generation of HDTV sets with Apple TV technology built in.”

“AirPlay, for those who missed the import of the brief demo at Apple’s Sep. 1 special event, is the company’s proprietary technology for streaming audio/video content from Apple mobile devices (iPhones, iPads, etc.) to the Apple TV set-top box,” P.E.D. reports. “Apple has been licensing the audio portion of AirPlay to speaker manufacturers for $4 a pop.”

P.E.D. reports, “Now, it seems, it’s negotiating with TV makers for the rights to put AirPlay video chips and software in their TV sets.”

Read more in the full article here.

MacDailyNews Take: Game changer.

27 Comments

    1. I no longer buy Ford automobiles because of their embedded Microsoft “sound” systems. But, I can see myself ONLY buying a new HDTV if it has embedded AirPlay! Funny how that works…

        1. @MrMcLargeHuge

          No one said it didn’t work (give it time. it is by design destine to fail). I think the point is, and I could not agree more, MicroShaft will see not one penny of mine, period.

            1. ‘xcuse me? Do I have any choice in the paying of taxes? Uh, no. Regardless of how said monies are wasted. The key to this point, oh great ass pickle, is CHOICE. Look it up. :~)

    2. The inclusion of Airplay in the US may happen, but the stronghold of the ISPs on the dedicated cable desktop boxes in Europe is such that European TV sets may never see the feature added to them.
      More work for the European Commission, which sports a commissioner dedicated to stop anticompetitive behavior.

      1. Airplay is primarily, at least in my home, for personal content. My pictures, my movies, my music. It hardly competes with cable companies. In fact, it could help Cable companies by allowing TV customers to enjoy Airplay functions without buying an TV, which does compete with their paid services.

    3. What is Apple going to do when they’ve connected everything? Their product line is slowly but surely boiling down to one necessary product. An ipad that operates a mac mini that is viewed on your tv. And eventually, the mac mini is “floating” over our shoulder wherever we go. One device to rule them all. Apple will be the greenest idea ever.

    1. The iTunes Store changed all that.

      So, now we finally have it: the mythical Apple TV set…
      brought to you by Sony, Samsung, Philips, LG, etc., etc..

      Given Apple’s string of successes over the past decade any company that Apple wants to partner with would be foolish to pass up the opportunity. Imagine the fate of a corporate exec who says NO to Apple?

  1. Cable execs, absolutely. Studio heads? Maybe not as much. The cable execs should be worried because they are essentially middle-men that are passing content from the studios on to the customer.
    If NBC can release an app, charge customers $10/month for access to their shows and the customer can then use AirPlay and push the content to their TV, who needs the cable companies (obvious exception is that Comcast now owns NBC)?
    I think a lot of the reason studios are hesitent is they’re wondering how they can make money through the apps to make up for possibly losing cable subscribers. I think offering free apps like they exist now with commercials and delays in terms of episode availability is an option, but I think if customers can get $5-$10/month subs to have immediate access/no commercials for network shows, they’d definitely consider it. Perhaps $10 is too much, but it would essentially be a la carte programming.

  2. I think we are seeing the start of something here. Imagine a future where apple decides to license iOS! Watch how fast Samsung and other partners would drop the turd of Android instantly. iOS is the future no one expected from Apple. It is going to kill the whole Mac vs. PC debate because iOS will be the desired platform by all.

  3. Apple gets into every living room in the country, and the “commodity” status of TVs becomes a huge benefit.

    The fee Apple charges may one day be worth more than the manufacturer’s margin on a television.

    What I love about Apple is the lack of ideology. Despite what you hear in the media they are completely practical people. They craft business models that makes the most sense in the different fields they’re in (look at how they sell iPhones, Apps, iPods, Macs). Here it sounds like they are applying the “Windows” model to TVs — where it makes perfect sense. Whereas Microsoft tried to use the “Windows” licensing model just about everywhere.

  4. Finally an Apple TV rumor that makes sense. It just took a long time for the data to filter out and people to connect the dots.

    It never made sense for Apple to enter the cut-throat television market. It evolves too quickly, tastes change too fast, the margins are very low, and there’s too much competition. And the game-changing hardware evolution has yet to be invented (LCD, plasma, DLP, etc. – all still exist, and are quite cheap, and even 3D isn’t a game-changer, at least not yet).

    But if Apple convinces all of the TV makers to support AirPlay (ala NetFlix, Pandora, etc.), then the content and smart-phone markets will turn even more Apple-centric.

    Apple will let someone else manage the drudgery of appliance manufacturing, take a royalty charge from each device sold, and sell beaucoup content via iTunes and AirPlay, as well as cement a permanent(er) lead in the iDevice market.

    1. I disagree about the part about how they shouldn’t enter the “cut-throat TV market” because “margins are very low”. The same thing was once said about Apple introducing the iPhone to the “cut-throat” and low-margin cell-phone market. Knowing Apple, they are very likely to make their own high-class Wide-screen Apple TV (and they may also license ATV tech).

  5. If Airplay were installed on TVs, receivers and DVD players, why would you even need an AppleTV?

    This is just the kind of completely disruptive move that only Apple would do. Introduce a new product which completely displaces a current more profitable product. They would make less money on the licensing than selling AppleTV hardware, but they would make more money selling iDevices and iTunes content.

    1. Wrong. They would make more money on Apple TV technology licenses but less per unit. They would likely sell 1000X more integrated chips than free standing Apple TVs. Even assuming 100X, at $4/ pop that would be $400. That’s more than they are making on Apple TV. THEN, they would also sell roughly 1 IOS device (at least) per integrated TV set sold. . . THEN they would also sell iTunes content. . . THEN they would sell additional accessories like Airport, Airport express, and Macs. . . another cash machine. They could license it for a nickel and still make money.

      1. Oh I agree with you, but I think Apple will need to make the Airplay licensing dirt cheap to succeed. Even the current $4 is probably too much. From what I understand, the current AppleTV is selling quite well.
        I was simply pointing out that most companies would not nix a product that was selling well.
        We don’t really know since Apple hasn’t given solid figures on the AppleTV since December, I think and we don’t know the margins on that product.

        1. I think apple TV and televisions with apple chipsets can co-exist for at least 5 years. The apple TV would cover the gap on the normal TV replacement cycle. Not everyone is an apple maniac (like myself) and adopts the new technology as soon as it comes out.

  6. On second thought, this really isn’t the “Windows” model at all. I guess in my mind I was thinking that Apple would be licensing the ability to run iOS apps on a TV, but this is much, much more brilliant.

    To the user it feels like you’re running iOS apps on your TV. The TV manufacturer will no doubt be paying Apple as if that was what they were buying. But you’ll still have to buy a full Apple device (iPod, iPhone, iPad). In some ways this is as if Microsoft had somehow managed to build and sell their own PC, while patenting every conceivable way to get the user interface onto a monitor — and charging every display company for the privilege of selling monitors.

  7. The best thing that Apple could do, if this becomes true, is to make sure THEY have some kind of subscription model in place before the licensing starts.

    The best way to do that?

    Buy Netflix, change the name to iFlix, and have their product and their content in/on every television in America.

    Between iTunes and Netflix (iFlix) they’d have every market covered.

    Now THAT’S a game-changer.

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