Pundit: Apple TV-set may face ‘barrier it cannot overcome’

“In all the markets in which Apple Inc. has had success, the consumer electronics company has been a pioneer,” Douglas A. McIntyre writes for 24/7 Wall St. “If it moves into the television industry, it will lack that critical advantage, which may be a barrier it cannot overcome.”

MacDailyNews Take: Without having seen it, how can anyone know whether it is pioneering or not? With history as our guide, one thing we will state unequivocally is that, if Apple does launch a product into a new market, they will believe it is a pioneering product that will shift the paradigm. See: Mac, iPod, iTunes, iTunes Store, iPhone, App Store, iPad, etc.

“A look at the history of Apple product launches makes the point that, even if Apple manufactures and markets the best products in a sector, it additionally has the ‘first mover’ advantage, to use an overused Harvard Business School term,” McIntyre writes. “The Mac was first sold in 1984 under the name Macintosh. That put its computer in the market at the beginning of the PC age.”

MacDailyNews Take: Nice try, but no. Apple’s Mac was not a first mover. Apple themselves already had a raging success, Apple II, on the market at the time. Steve Jobs’ and team’s Macintosh shifted the paradigm, it was not a “first mover.”

McIntyre writes, “The iPod, which was first released in 2001, was an early version of portable multimedia players.

MacDailyNews Take: Early version, yes, but iPod was not first. Apple entered a market that needed to be revolutionized. iPod shifted the paradigm, it was not a “first mover.”

McIntyre writes, “The iPhone, released in 2007, was among the first smartphones aimed at the consumer market.”

MacDailyNews Take: Again, McIntyre stretches too far to rewrite history in order to support his conceit. iPhone was not the first “smartphone” (it was, of course, the first “brilliantphone”) nor was it the first “smartphone” aimed at consumers. iPhone shifted the paradigm, it was not a “first mover.”

McIntyre writes, “And the iPad was one of the first tablet PCs.”

MacDailyNews Take: Sheesh. The first “tablet PC” was described by Alan Kay (Dynabook) in 1972. Apple themselves debuted the Newton MessagePad in 1993. Microsoft has been trying (and failing) to sell Tablet PCs to suckers since 2001. Apple’s Steve Jobs debuted iPad on January 27, 2010. iPad — as with the Mac, iPod, and iPhone before it — shifted the paradigm, it was not a “first mover.”

McIntyre writes, “The television obviously has been at the center of the living room for decades… Apple’s powerful brand may help the firm to elbow its way into the living room. However, Americans already have televisions with massive screens, sophisticated audio and boxes for satellites, cable TV and even the current version of Apple TV piled high next to those screens to allow for access to a nearly infinite body of programs. Apple will be late to the TV market. That creates a barrier the company is not used to and a situation in which it has to gain on the competition from behind.

Read more in the full article here.

MacDailyNews Take: People already had or had access to computers, portable music players, smartphones, and tablet PCs. It took Apple to revolutionize each and make consumers aspire to own them. McIntyre’s entire argument fails the test of logic and reality. Apple isn’t the first mover. In the markets in which it chooses to play, Apple is often the first one to get it right and quickly the one all others then attempt to copy.

Apple employees look at existing markets, services, and products and ask themselves, “How can we improve this, so that we would want to buy and use it?” Television is actually the perfect candidate for an Apple revolution. Stodgy and not very intuitive, the TV set calls out to Apple for help.

McIntyre’s claim that Apple will “be late to the TV market” is ridiculous, especially when he refutes it all by himself in the sentence before by mentioning “the current version of Apple TV.” If they’re already in the market, then they can’t be late, Dougie (pat on the head, run along now, boy; go have a lollipop, the adults are talking now).

The “barrier” that McIntyre tries and fails to construct is actually the condition that Apple actively seeks out and with which the Cupertino Colossus is intimately familiar. Their whole business is built upon it; it’s a foundation, not a barrier. We can almost hear Tim Cook thinking, “Hmm, mediocre products. Not very user-friendly. People don’t really know what they want or how to buy – another perfect market for us to transform!”

The Apple freight train has routinely driven through McIntyre’s ill-conceived “barrier” as if it didn’t exist, because it doesn’t.

41 Comments

  1. One thing the new ultra-thin HDTVs need to better address is connectivity. They are so thin it’s hard to find space for a power supply or the audio/video input-outputs. Seems an external brick with the power supply and inputs may be a necessary evil with these units as well as external sound bars.

    1. For Apple to sell a TV, it will have to be very different. I’ll predict here what it could be. It will be a 1″ thick panel that only mounts on a wall, the mount sets it 2 inches from the wall. It will only be a video panel with minimal electronics. The speakers are on the back and sound washes the wall and bounces to viewers. The bezel is minimal aluminum as thin as an art gallery picture frame. Power is wireless from a pad on the wall in back of the TV. Power goes to the pad via a flat unobtrusive cable. All video and audio signal input is wireless. Any Apple device can act as controller or “tuner”. Macs, pads, pods and phones.

  2. Some very quick mathematics will disprove the Apple TV theory pretty quickly.

    Apple will not, I believe, sell a 50″ Apple TV cheaper than a 27″ Thunderbolt Display which retails for $999. This puts the Apple TV in the $1,500 to $2,000 bracket.

    Television sets, in general, last more than 5 years. On average, people replace their TV sets in 7-10 year cycles. There’s no real advancement in TV technology that will necessitate shorter replacement cycles.

    Apple TV then will sell in fewer numbers than XServe. And you know what happened to the XServe line after a couple of years of swimming against the tide. Dead as a Dodo.

    1. iCal’ed.

      You cannot divine the future while trapped in the current paradigm.

      If I told you in 2006 that people would soon buy a $500-$800 smartphone that would revolutionize not only the industry, but the world, you’d have said the same thing you said above and you’d have been just as wrong.

      (Brought to you by Carl’s Jr.)

    2. You cannot reach a proper conclusion without knowing all of the variables.

      You’ve disproved nothing, except that you’re a genius.

      You remind me of somebody:

      “We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.” – Palm CEO Ed Colligan, November 20, 2006

      Less than two months later, Steve Jobs pulled the first iPhone from his jeans’ pocket and revealed Colligan to be a total fool waiting for his pink slip.

    3. The problem with your screen size:price theory is that TV screens are MUCH lower resolution than computer displays and much cheaper to build. This is why 720p TVs are much cheaper than 1080p TVs. The higher the resolution the more expensive it becomes to manufacture.

      It doesn’t matter what the life cycle of the product is in a market that is worth billions and billions of dollars a year – it’s still a viable market to enter.

      The Xserve was not a consumer product; it was aimed at small production shops, so it had an *extremely* limited market.

    4. Your prediction assumes that Apple will drop the current AppleTV and produce only TV sets. That would be incredibly short-sighted. I see Apple, if it even gets into the TV set market, having a two-pronged approach:

      1) iTV, which has a built-in (and possibly upgradable) iOS powered media hub, which can deliver content, be controlled by gestures, remote(s) like your iPhone/iPad, maybe Siri (I’m not convinced Siri would work unless it is part of your iPhone/iPad as a remote), and some other revolution which pulls all the various devices, content delivery systems, sound systems, etc. together in one easy interface. This would obviously be a premium TV product.

      2) AppleTV continues in an upgraded fashion, able to do much of the iTV but no gesture controls, perhaps a lack of other device control, and other limitations. This would capture the lower market of people who don’t want to upgrade their TV sets to a new iTV yet but still want some of Apple’s TV goodies. This lets Apple get into the door, and create the “want” for an iTV later while pulling more consumers into its ecosystem.

  3. McIntyre sounds just like the people who thought the iPod, iPhone and iPad would fail because, ‘We already have other companies that make this stuff.’ Just because other companies make stuff doesn’t mean Apple can’t make it better.

  4. Most people think that Apple will sell screens with some sort of internal electronics. I really doubt that that is where the money is. Just check out the existing TV manufacturers profits. The money will be in a box that everyone will buy and upgrade every few years that gets easy access to all the content they want including their existing video by storing it on iCloud. Money will also be made by selling content.

    1. No, they don’t want to rent those. They were REQUIRED to by the FCC.

      Things are changing now as systems become ALL digital and they can drop analog since the FAA now allows that.

      You will then be able to use a small cheap converter no larger than a Mac Mini

  5. Surely TV’s will just become monitors? Hopefully with one cable for power and connections, and then you can just connect a TV box of some sort (same as the make of the tv, or from someone else of your choice if it’s a standard connection) to offer all the other functionality. In essence the TV box will basically be a computer, but with TV specific connections and software. This would also get people away from having TV’s on their wall with half a dozen cables dangling from them.

  6. Come on MDN, this is ridiculous. I love Apple, I trust Apple, and if they put out a TV they may indeed ‘revolutionize’ the TV or how we use it, but the point of the article has a very valid point — the current state of TVs is WELL beyond where PC’s, MP3 players, smart phones, tablets, etc were when the mac/ipod/iphone/ipad/etc came out.
    I don’t think the article ever said Apple will fail, it simply said it will face a barrier that it hasn’t had to face before. And this is absolutely true.

    1. That’s what you shortsightedly think today. In 2006, some people – including Palm CEO (see above) – thought exactly the same thing about mobile phones before Apple showed the world how it was supposed to be done.

      McIntyre has no valid point, especially since every one of his examples are not of Apple being “first movers,” but rather of Apple being market disruptors.

      1. You’re not getting it. Yes some of his details might be technically wrong but the general idea is correct. It doesn’t matter what ‘some people’ thought about the iphone, or mac, or whatever.
        The FACT is that the TV market IS much more established than the cell phone market was. Almost EVERYONE has multiple TVs in their house. Most people have a flatscreen. Many people have a DVR/digital box of some sort.
        Could apple revolutionize all of this? OF COURSE! They could come out with a TV that has features people didn’t even consider and in a couple yrs we’ll wonder how we lived without it. But very few people owned a tablet when the ipad came out. Few people owned a cell phone that did much more than make phone calls and take bad pics when the iphone came out. Even less had a computer in their house when the mac came out.
        There is most definitely a bigger barrier for Apple if they come out with a TV. Doesn’t mean they won’t bust it down, but it exists.

        1. But NOBODY has a smart TV, as much as they might like to think they do.

          I think we’ll all be surprised (or not at all surprised) when we see that yet again, Apple has gone into an existing market, even a heavily competitive and quickly evolving one (identical to the mobile handset market at the time) and flip it upside down with a product that will shift the way all competitors manufacture and market their devices to compete with Apple’s game changer.

          I think MDN’s point about a paradigm shift is spot on.

          1. For Apple to be able to pay content owners as much or more than the cable monopolies while offering better value to consumers will be a very difficult task. The problem is not technological, it’s all about CONTENT. That’s the nut that Apple hasn’t been able to crack yet.

            Could the ‘New Apple TV’ proponents specifically tell what they want this “Smart TV” to do that the current Apple TV + your monitor of choice doesn’t already do?

        2. Yes, they could build a ‘master’ 50-60″ TV for the living room that can stream various content to ‘satellite’ TVs of 30-40″ throughout the house utilizing 802.11ac or CAT6.

          Just a thought…..

    2. I agree that a TV is by itself more advanced than, say, the mass phones prior to iPhone. And I know I personally have no problem with my TV… the TV… but the rest of the experience is ripe for innovation. It’s an interesting situation created by race-to-the-bottom pricing: The TV has less amazing sound then a dedicated sound system, so there are two remote controls if you’re just watching over-the-air broadcasts. Add a BluRay player and you likely have a third remote. Add the AppleTV and you add a fourth remote (although I *love* Apple’s “Learn new remote” methodology). Add a cable TV box and you’ve got not only another remote but a pretty crappy content discovery mechanism *cough – Comcast – cough*. To the less-than-confident-with-technology member of the household, turning on the TV (remote 1), turning on the sound system (remote 2), turning on the content providing device (remote 3) and then telling the sound system which input it should amplify and the TV which input it use is all pretty daunting. So to think there’s anything different about this barrier to entry than the previous ones Apple has tackled is to not look at the full experience, which is where Apple pretty much nails it every time.

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