But history suggests that Apple will have a much harder time here.
The tech industry is littered with failed attempts to revolutionise TV, from the early days of interactive TV in the early 1990s, through WebTV and TiVo later that decade, Windows Media centre in the 2000s, and most recently Apple TV and Google TV. Just to name a few.
We have no idea what an iTV might be, but some things about the TV business remain constant, and make it very hard for Apple (or any other tech company) to revolutionise.
- People don’t replace their TVs as often as their phones. Carrier subsidies make it affordable for users to replace their cell phones every two or three years when their contracts run out. There are no subsidies for big, beautiful flat screen TVs, or for third-party boxes. The only subsidies are offered by the TV providers for the boxes they choose to deliver their services. Apple won’t suddenly overtake that market. (Although Google might once it owns Motorola, which is the biggest provider of TV set tops today.)
- Cable companies have regional monopolies. When Verizon wouldn’t agree to Apple’s terms of control on the iPhone, Apple gave AT&T an exclusive. That allowed Apple to control the billing relationship for content downloads and lock AT&T out of the iPhone interface to maintain simplicity. Apple might want to exercise the same kind of control with Apple TV, but cable companies have regional monopolies in most part of the U.S., so Apple would be forced to strike deals with satellite or IPTV providers, which have smaller footprints and fewer customers.
- Cable companies are also the most popular Internet gateway. You might say, the heck with the cable companies — Apple could just bypass them and deliver video on demand over the Internet. But the majority of Americans get their Internet access from their cable providers. And if you think cable companies won’t leverage their power here, go back and look at the Comcast-Level 3 dispute from last year, where Comcast upped fees for Internet video delivery right after Level 3 signed a streaming deal with Netflix.
- What need would it fill? The appeal of the iPod was immediate and obvious: “carry your entire CD collection in your pocket.” Same with the iPhone: “a cell phone with a beautiful touch screen and the power of a computer in your pocket.” Steve Jobs was a product genius and he might have come up with a similarly compelling use case for a TV product, but it’s hard to imagine what it could be. Games on your TV? (Buy a PlayStation or an Xbox.) A really simple remote? (It’s not worth buying a new TV or device just for that.) Internet video and TV and movies in one place? (Perhaps, but that’s been tried before — see Google TV and Apple TV — and it hasn’t taken off.) A gigantic touch screen? (That would be cool. Technically possible? Useful? Probably not so much.)
The only thing that would be truly revolutionary is if Apple found a way to deliver the full TV experience without requiring you to pay a cable bill. And the incumbents would struggle against that outcome with every weapon they had.
It has been foolish to bet against Apple for the last decade. But it’s been equally foolish to bet against the slow-moving TV industry, which has successfully resisted every effort at major change for more than 20 years.
If Apple actually manages to pull this off, it would be its biggest coup yet.