ideas & more by carl winter
founder of the trading project to solve the world's problems,
August 20, 2013
by Carl Winter
The so-called iTV is no stranger to rumors and predictions. From 4k displays to start-up acquisitions to rumors of content deals, bloggers and journalists are excitedly piecing together a picture of what a potential iTV could be.
iTV Concept, Courtesy of Digital Trends
Thus far, most rumors and predictions have focused on the software opportunities Apple could capitalize on to integrate their as-yet-unannounced TV into their larger iEcosystem, while hardware speculation has been somewhat absent from the discussion. Implicitly we think that most of the hardware opportunities are already being exploited by the Samsungs, Sonys and LGs of the world. OLED, 4K, 3D--these all have their proponents, but none would differentiate Apple from the crowd.
If we look to Apple's history, they often eschew features commonplace in competitors' products in favor of a bold rethinking of the product category. With iPhones they eliminated the keyboard; with iPad they ignored the ability to run full-blown desktop applications. With an iTV we can expect similar snubs to now-commonplace features like "SmartTV" options, 3D, and do-everything remotes.
Another thing we know about Apple is their indifference to price (at least at product launch). The iPhone was priced at twice the cost of most other so-called smartphones at the time, and the Macbook Air similarly debuted at a cost far outside the accepted rate for a netbook or ultraportable laptop.
It's not that Apple doesn't price its products appropriately; it's that for some reason prognosticators can't dream in the right way to imagine why Apple might be able to charge more for a product so commoditized by current offerings. I believe that is the case with the iTV: We collectively haven't yet imagined how Apple will be able to squeeze twice the cash out of us for a TV.
I think the answer to this lies partly in how Apple recognizes problems we didn't know we had. Heading off on vacation before the iPhone, no one complained about having a GPS in the car, a digital camera in the backpack, and a phone in the pocket (not to mention an iPod hooked up to the car stereo or the handheld gaming device in the glove compartment). That was fine with us. Today our number of gadgets hasn't necessarily decreased, but the iPhone made it silly to carry around multiple electronic devices when one would do. The iPad was marketed as a "lean-back" device, a content consumption device, which switched the narrative argument from "get work done just as well as a laptop" to "have more fun doing some things you do all the time--email, video-watching, magazine-reading".
Though the iPhone doesn't take as great pictures as a digital camera does, it's close enough. And though writing emails is faster on a laptop, it's nice to be able to toss a $400 1-pound device in a bag and have your emails, videos and magazines available immediately wherever you go. Apple makes us covet devices that do things no other devices do. And we pay a premium for those unique experiences.
Before we get to the feature no one is talking about, let's talk about one they are. The common wisdom with regard to the forthcoming iTV is that the solution will be a software one, built into a small hardware box or stick that can connected to one's TV via HDMI.
If Apple truly is able to deliver al a carte purchasing of a full history of TV shows on demand, they will be able to offer one of two pricing models to drive revenue: 1) Offer a product for $99 and charge per program watched; or 2) charge $499 or so for the set-top box and charge at-market rates for each TV network.
The small hardware box + software solution is much of the genius of the final iTV, but Apple has mentioned it has a "grand vision" for television. When a hardware+software company says things like that, we can afford to dream a little bigger than a small HDMI stick. p>
If history is any indication, Apple will look to not only release an "add-on" product: They will release a full-featured television with premium features, and offer it at a premium price. To be sure, we can imagine a 4K "retina display" being a marquee feature pushing the price of a 60" TV into the $3000+ range. But I think we prognosticators have missed an obvious idea that Apple most likely hasn't ignored.
With the iTV, I believe a simple feature will be added which will give Apple both the marketing message to solve a problem we don't yet believe exists, and allow them to charge a premium for their product. That feature is high-quality sound.
It's not rocket science, but for some reason bloggers and predictors alike have not mentioned it yet. I'm not sure why. For all the features that can be accomplished with a stick or a set-top box, all of these and more can be integrated into a full-sized TV panel.
Though an iSight camera affording Facetime calls from the living room would be welcome, I think high-end sound is the key to Apple's grand vision of how to make money with a full-sized TV.
Here is how I see Apple making the case for their TV with integrated high-end sound:
Home entertainment has a hardware problem: we simply have too much stuff. Think about your entertainment center at home and name the components. It might go something like this:
TV - Cable Box - Media Streaming Device - DVD Player - Gaming Console - Receiver - Speaker
A typical home theater setup
That's a long list, but unfortunately, if we look harder, it doesn't stop there. Each of those products has at least two cables coming out of it--a power cable and a cable to connect it to at least one of the other devices. Audio cables, video cables, speaker cables... And all of these cables get plugged into a surge protector. We've gone so overboard with cables we now all assume it's fine to have a cable to manage other cables! We at Apple asked ourselves, why have all of these cables when one cable could do just fine? So that's what we created. Our iTV has such great sound you will only need one cable: a power cable.
A really bad iTV illustration with integrated high-end speakers
Now, that may be a little exaggerated, but it's not far off from Apple-launch hyperbole of past product introductions. And together with their integrated ecosystem, it presents a compelling case to spend a premium on their product:
Why spend $1000 on a receiver, DVD player, game console and media streaming device when you don't need to?
Why buy a piece of $1000 furniture to hold all of this equipment?
Why not free up valuable space in your apartment and mount one device on your wall, and still hear all of your tunes streamed effortlessly to the finest sound you've ever heard out of a TV?
To be sure, there are a number of soundbars available that might do this just as well as Apple, but Apple believes in creating the best products to define categories, and in order to do so I believe it must address the woeful sound integrated into the current supply of TVs on the market. Inevitably other companies will copy Apple in this regard, but they will not be able to charge the premium for this feature that Apple will, as Apple's TV will be the only device that so deftly balances the truly useful content-finding software solutions with the high-end hardware solution to create a unique product.
Audio and home theater geeks (like me) will not be satisfied with the Apple speakers, since no integrated speakers can match a carefully matched system; but that's fine with Apple. They show little regard for the outliers, and love to capture the 80% of users who flock to soundbars because they're easy, and the sound is better. It may not come to pass, but integrating high-end audio into a full-sized TV set would allow Apple to not only snub their noses at the pathetic current TV offerings, but also give them the license to charge a premium price to maintain their industry-leading margins.
iid8 Productions . Carl Winter . 2StinkyFish