With a low $99 price point and syncing capabilities with Netflix, ABC, and Fox, Steve Jobs’ newly overhauled Apple TV is primed for parents, not geeks. Brian Ries on how the company is abandoning its early adopters.
Apple CEO Steve Jobs took the stage Wednesday morning in San Francisco, eager to share with the world the latest news on his company’s notorious little hobby—the Apple TV.
After an original generation, four years of neglect, poor sales, and little innovation, the set-top box that plugs directly into a TV is getting a major overhaul. And unlike the company’s other tent-pole product launches—the iPod, the iPhone, the iPad—the Apple TV is rolling out of the production lines primed for mainstream acceptance.
It’s $99 price-point is low, by Apple’s standards, and it is equipped to sync with Netflix, ABC, and Fox. It’s not “amateur hour,” as Jobs put it, but comes ready for professionally produced Hollywood content, just like the average Joe Consumer likes it.
But that’s weird. This is not how Apple usually rolls out a product.
When the iPod was first introduced, on Oct. 23, 2001, it went on the market for $399, meaning only the very early adopters—those with the fat wallets and the willingness to take a risk on Apple’s then-untested MP3 player—were there to jump on board.
With the iPhone, same deal. Early adopters flocked to Apple’s stores to pick up those early 4GB or 8GB versions, which sold for $499 and $599, respectively. From there, they went out into the world, showing the revolutionary device off to friends at the bar, or co-workers at the boardroom table. When the price dropped in 2008 with the 3G model, mass-market adoption soon followed.
Of course, the Apple TV is already on a few TV shelves around the world. But it’s not as overwhelmingly adopted as its iPod and iPhone siblings were at this stage in the market rollout.
Indeed, unlike some of the other set-top competitors on or soon to be on the market—the Roku, the Google TV box, Boxee—the Apple TV seems to be an inherently geek-repellant device.
“The Apple TV Isn’t for Pirates, It’s for Parents” was the headline of tech writer Matt Burns’ article on CrunchGear. Pirates, those tech-aware “consumers” who get most of their content via illegal file-sharing sites, won’t gel with Apple’s new set-top box. “It’s clearly for those that for one reason or another, want an easier or legal way to get on-demand content on their HDTV,” wrote Burns. “I can’t think of a single device that makes renting TV shows and movies easier.”
It’s so easy, in fact, that perhaps Apple knows its TV isn’t meant to be a standalone device at all, and that’s why it knows that at $99, it can move forward toward mass-market adoption without the influencers already on board—because it has already secretly reeled them in. You’re hooked, Apple fans, and you didn’t even realise you bit the bait!
“This is how to position a $99 price-point not feel like a race to the bottom,” tweeted James McQuivey, a principal analyst at Forrester Research. “It’s really just a peripheral for iPhones and iPads.”
“As soon as iOS users realise Apple TV is a cheap peripheral, they’ll care about it in a way they didn’t care about Apple TV before,” he added.
In a third tweet, McQuivey wrote that Apple is taking a big gamble in making it an adjunct to the iPad and iPhone, noting they’re “definitely trying to carve out new territory here.”
Unlike some tech pundits‘ earlier predictions, the new Apple TV doesn’t appear to be an app-based device. The well-sourced John Gruber of Daring Fireball writes that while it is running iOS, and “it’s possible that some sort of SDK [software development kit] is coming in the future,” he’s not going to hold his breath for the box to open to any third-party application development. And if Steve Jobs’ comments on bringing computers into the living room are any indication, Gruber is making a fair statement.
Consumers “don’t want a computer on their TV,” Jobs said at Wednesday’s Apple music event. “They have computers. They go to their wide-screen TVs for entertainment. Not to have another computer. This is a hard one for people in the computer industry to understand, but it’s really easy for consumers to understand. They get it.”
In a tweet, Michael Gartenberg, an analyst at Altimeter Group, said, “New Apple TV is to television what iPhones were to phones three years ago. Stage is set for mass-market adoption.”
When reached over the phone, Gartenberg elaborated on Apple’s new strategy in going straight for the average TV viewer’s entertainment centre. “They’ve learned that when you’re trying to move the paradigm like this, you’ve got to provide some of the things consumers are expecting.” For Apple, Gartenberg said, that means the company has to do it at a reasonable price point.
“At $99, if you’re a consumer, you might give it a shot,” he explained.
And unlike Google, said Gartenberg in reference to Google’s coming set-top Google TV box, Apple’s not trying to get rid of the cable box but the DVD player.
“That’s why this price point was very critical for them,” he said. “They couldn’t have built it a couple of years ago. The technology has improved.”
“There’s no cachet for a set-top box,” he added, saying that nobody’s going to take the new Apple TV out to the bar to show off how cool it looks.
“This thing is designed to sit out of the way and not be seen—be unobtrusive. This is a utilitarian device, designed to take your TV to the next level.”
But whether the Apple TV will succeed this time remains to be seen. It’s in pre-order now and hits stores in about four weeks. Steve Jobs and Co. are taking a risk, but by calling it their “hobby,” they’re keeping expectations low.
Given their success with remaking entire industries in years past, the possibilities, in this case, are indeed quite high—geeks or not.
Brian Ries is a Philly-born senior editor at FREEwilliamsburg.com and tech and social media editor at The Daily Beast. He lives in Brooklyn. This post originally appeared at the Daily Beast and is republished here with permission.