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Apple's Showtime


September 13, 2006 12:37 PM PST

Well you can't be a tech based blog and not talk about Apple's new product announcements. I would have posted something yesterday but being a historically anti-Apple guy I needed some time to calm down and gain some objectivity. (I have to remind myself that I'm an Apple share holder so what's good for them is good for me also). This event was all about the iPod and iTunes. Keeping focus is one of Steve's things so that explains why the 24" iMac was announced last week instead.

There were lots of things announced, but no real surprises (if you follow Apple rumors that is). The only real surprise is what was not announced - the wide screen iPod. (Yeah people also keep talking about the iPhone, but I don't see that happening). My top three announcements:

  1. 8G Ipod Nano
  2. 640x480 Movies and TV
  3. iTV

Honorable mention goes to the shuffle. Clipping a music player to your shirt is pretty cool. I still don't think it would kill them to put some sort of small display on it however.

8G in a tiny player with no moving parts is a pretty good idea. Nice that they adjusted the price points. I'm bummed that the nano doesn't support the new casual Ipod games. (I think $5 iPod games are a cool idea, especially if you can get Bejewled). Good job making the case aluminum and less scratch prone than the previous model. Personally I like the older look better, and that brings me to the colors. Something bothers me about them. Actually more to the point, I'm bothered by their use as a psychological marketing tool. If you check out their Nano line up, you'll find that the colors are not equally available across all capacities. In fact there is a very careful distribution of color. One thing good marketers know is how to leverage the dimensions of 'status' and 'differentiation' in their products.  Lets face it, now that nearly everyone has an iPod how do you stand out from the crowd? Well you have to have the most expensive iPod. The problem is that it has been hard to tell the expensive ones from the cheap ones from a distance - especially with the nano. Now this problem is solved. If you buy a lowly 2G model you can have any color you want as long as it is silver. From a distance someone will see you with a silver nano and know you are a cheap scape. If you have flashy colors then you are clearly middle class with a 4G nano. (Sure they offer the 4G in silver also, but I predict only the most clueless would buy one of those). And if you have a black nano - you are surely upper crust with your 8G wonder. As with the Macbook, black is for the 1337.

Bout' time. Now for the tricky part, since they decided to only offer downloads in one size (counter to some rumors on the topic) I'm wondering how the previous gen Ipods will handle the increased resolution. Maybe I just missed it in Steve's address somewhere. It must work somehow since even TV shows are now coming in the higher res. As for the movies, I'll say there were no surprises here. If this were 2005 some might balk at the fact that only one studio (effectively) has signed up. But after the success of iTunes TV shows, I don't think anyone need worry that the rest of the studios will be able to resist that sweet smell of money for long. I think that what remains to be seen is if the 'purchase' only model will be effective. To be sure there are some real trade offs paying near full DVD prices ($15.00) for an electronic only version that is DRM restricted, lower quality, doesn't include the extra DVD content and might get wiped out in a hard drive crash. At least these have been the traditional arguments for other download movie services includes Amazon's new Unbox. Now compared to 10.00 to go to the theater 1 time view, no pause, people with cell phones, young kids crying, people kicking your seat and eating stinky food, and walking on sticky floors it might not be so bad. Yet I wonder if a time-bombed rental model might be more reasonable. I like to watch a lot of movies (thank you NetFlix), but I don't really feel compelled to own that many. I guess time will tell here. At least with TV shows you are getting something you can't get anywhere else - the ability to download a show the day after it airs. With movies, they will be released the same time as the DVDs so the differentiator is not as clear.

Well the final piece of the puzzle is revealed. Many have been speculating on Apples strategy in the battle for the living room for years. Even Crazy Cringley has had more than his fair share of theories regarding this. I think this set top box approach is a pretty good solution for Apple. It extends their media control to the last battlefront- the TV. BTW does anyone know for sure that this will work with PCs as well as Macs. I have to assume it will. I think the specs of the box are very nice, the form factor is cool, but to be honest though I think that 299 is too much. Seriously you can get an Xbox 360 for 299 and use it to stream content as well as play awesome games. I have been reminded many many times, however, that I am not Apple's target customer so my perspective on Apple pricing is skewed. To be honest the iTV is not the only way to get your iTunes video onto your TV - even though Steve seemed to be positioning it that way. You can currently hook your Macbook or Mini to the TV with minimal effort and drive it with Front row. You can also use your Ipod via the dock + AV cables + remote. So what is the primary use case then? The most likely one seems to be users with fixed macs in an office. By fixed mac I mean iMac, mini or tower. Ahh back to the mini. I still think it would be a good idea to extend the mini to be the high end version of the set top box.  When the mini first came out I mused that with it's minuscule form factor it would be the ideal media center PC. I wondered aloud (as did others) why Apple didn't throw in a tuner and optical audio out. Well in hind sight the decision not to embrace the tuner is obvious. Why help people record TV when you can sell it directly to them for profit. Also they have since added optical out to the mini.

So what is keeping the mini from being the uber version of the set top box? Well I think it needs a few things:

  1. Better video out. Component would be nice for older sets. Also true HDMI (not cable convert) might eventually be required to play protected HD content.
  2. Client iTV software. They need to put the same (media center clone) interface on the mini that they are building for the iTV. Who knows maybe this will ultimately turn out to just be an updated version of front row.
  3. Finally I think you need some sort of couchable keyboard / mouse solution. Since you would have a full computer hooked to your HD TV, why not use it to surf the web etc.

So my theory: the iTV streams from a computer in the other room for 299, and the mini does it all in one box and plays DVDs for 599 (+ some accessories). When you look at the line up this way, I guess the 299 price doesn't look so bad. Rant: Oh and can someone explain to me why the iTV and the Mini don't have an iPod dock built into them? Wouldn't that just make sense? Shouldn't I be able to bring a movie on my iPod over to my friends house and just drop my iPod onto his iTV for easy viewing?

Final Thoughts
I found it amusing when Steve was spelling out his 'Apple everywhere' strategy.. "An Apple in the Den, Apple in the TV Room, Apple in your pocket". We have been hearing this from Microsoft for so many many years now. It is interesting to see different strategies both companies are using in the battle for the TV. Microsoft is going to sell you a gaming console that can also stream media from your computer. Apple is going to leverage their monopoly in online media (iTunes) and portable music devices to sell you a box that can stream media from your computer. Hmm I wonder if it will eventually be able to play games? These are not the only players trying to win that spot either. Tivo, Sony and all the traditional cable / satellite guys are fighting as well. I find it ironic that in the console wars Microsoft's greatest strength over Sony is that it has a unified cohesive online strategy with Xbox Live, while in its Media war with Apple it has chosen a fragmented, decentralized strategy (ala Sony). I know MS is trying to correct this in the 11th hour with Urge and Zune, but it may be too late. Currently I'm really enjoying using my 360 as an MCE extender. It is really slick, and currently the only box I plan to have hooked to my TV. But I can't buy downloadable TV and movies for it -- at least not yet... I wonder how and when MS will addresses this.

Comments (13)
Paul, September 13, 2006 03:33 PM:

I really think that any "timebomb" based rental model is doomed to failure, thanks to Netflix. I think that people have been trained to think of files on a disk as more or less permanent, and Amazon's model is going to leave people confused as to whether they bought it or rented it... "Hey! where did that movie go?"

I like the set top box idea, and I'll probably get it if it can stream other media files too, and not just iTunes movies. I think that many people really don't want to buy a computer that sits by the TV, it would seem like a waste. But a set top is a very clear thing that people understand. Tivo, for example, is a powerpc linux box and effectively a computer but its users don't care. It's a thing to record and play video.

I have a problem purchasing digital content that has DRM on it, simply because the vendor may change the rules on you. Apple has already done this with iTunes... they have, at least once, unilaterally changed how many computers you can activate and how many times you can burn a song to disk.

Now imagine that you've bought thousands of dollars of eContent, and some buggy code in iTunes or Windows Genuine Advantage or Unbox decides you aren't authorized to play it. Or they changed the EULA after you've paid (which you agreed they could do when you clicked through the first EULA)? Now what?

I've bought some music and TV shows from iTunes, but I've treated it as a throw away purchase, like buying Battlestar Galactica episodes to watch until the DVDs come out. I can do this because the cost is cheap ($1 per song, $10 per album, $2 per show), but the movie model is different: $10 per movie. That's more than half of a month of Netflix, but with less resolution and more restrictions than a regular DVD. I'll probably stick to buying regular physical media, with a DRM purchase only when I can't get it anywhere else.

John, September 13, 2006 04:29 PM:

Wow it seems to me that Apple's informal coporate motto is "Always be a little bit evil". Check out AppleInsider's unboxing of a new nano. Here is a quote of what got my attention:

"Apple has conveniently (for its margins) offset the dock connector by about a millimeter, making the new nano completely incompatible with the first-generation iPod nano dock.

Similarly, users will also have to plunk down extra change for a new pair of iPod nano lanyard head phones -- the new nano's headphone jack is spaced further away from the dock connector."

I think the thing that bothers me the most isn't that Apple purposely rendered the new device incompatible with the old peripherals in order to sell more stuff, it's that Apple fans won't be upset by this.

Paul, September 13, 2006 09:52 PM:

Sometime websites are uniformed. Apple has consistantly messed with the form factor, more to come up with cool designs rather than just charge a little more for a new dock. Why would they drop the price of the premium iPod by $50 if this was the case? Likely, there were design reasons given how small those things are, and the amount of stuff that goes in them.

Also, to address the complaint of having to buy new docks with each new generation of iPod, they've built dock adapters ($9 for a 3-pack) and a universal dock.

Paul, September 15, 2006 01:17 PM:

Some more on Apple's designers.

hayley hughes, September 18, 2006 06:46 AM:

hi i got a ipod apple for my birthday which was on the 6.6.06 and it was ok up to last week when i had it on the night before listening to it. but the day after i went to put it on and it just wen off completely ow wud i get it fix could i send it to you so you could fix it .

Paul, September 20, 2006 10:17 AM:

iTV to have a hard drive. That would certainly justify the $299 price.

John, September 20, 2006 10:31 AM:

Well it would make more sense if it did, as that would allow to download shows directly to it. But I'm skeptical. Iger's comments seemed to ramble a bit to me. He mentioned a small HD and allowing you to pull the content from the iTV back to your computer. I guess we will have to wait and see.

John, September 21, 2006 09:16 AM:

Are consumers ready to download content to their tv?

John, January 14, 2007 09:13 PM:

Not everyone thinks Apple TV will be successful.

John, March 23, 2007 09:56 AM:

Some AppleTV questions answered. What no true 5.1 audio?

J, March 23, 2007 12:36 PM:

I'm totally unimpressed with this offering. Without being able to play my existing media library, it's just not useful enough. The iPod could at least play mp3s in addition to the files bought through the iTunes store. I'm looking for a general TV media front end, not something that locks me into a proprietary walled network (I've got my cell phone for that already).

John, March 23, 2007 01:14 PM:

I assume you are referring to Divx / Xvid files? Yeah it is pretty lame that it doesn't support them. Microsoft did the same thing with the 360. It is a shame to have to jump through hoops to make this work. I guess that is just corporate greed at work. I was really hoping AppleTV would support Divx to put pressure on Microsoft. I hear AppleTV will play standard unencrypted mp4 files though. So maybe this is just an attempt to push things toward that standard container.

Itunes fans are going to buy these up though. The current limitations are 1. Crappy resolution videos on ITunes. 2. Crappy audio (apparently). -Although I'm sure this is not the hardware, but again the source material, and 3. Not being able to buy stuff directly from the device. 4. Lock in to ITunes.

All of those limitations are solvable. Jobs is no dummy, the first three will be fixed as time goes by. The forth? Yeah, right.

Paul, March 23, 2007 01:20 PM:

I'm not getting one unless it includes DVR. I just don't need a dedicated set top box for playing iTunes movies, since I already have such a device: an iMac.

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