From Silicon Alley Insider:
Apple executives continue to refer to their Apple TV set-top box business as a “hobby” — which is a polite word for “failure.” Time for that to change: If Steve Jobs wants to make a serious run at owning our living room’s “digital hub,” then Apple TV needs a serious overhaul, ASAP.
Why now? Because even though the industry is still nascent, the Internet-connected living room is becoming more of a realistic proposition. And the market is quickly getting more crowded.
Yesterday, LG announced it would begin selling a Blu-ray player in September that can play Netflix (NFLX) streaming movies — and other digital content — for “well under” $500. Wednesday, Dell (DELL) showed off a sexy new mini computer, starting at $499, with a built-in HDMI port for hi-def TVs and an optional Blu-ray drive. So on and so forth.
Suddenly, Apple TV has lost most of whatever edge it may have had. It can play iTunes movies, and YouTube videos, and… well, that’s about it. Piper Jaffray’s Gene Munster estimates Apple has sold 2.6 million Apple TVs since spring 2007, which sounds high to us. But no matter what the number is, Apple TV isn’t a mainstream product. So how can Steve Jobs change that?
Open it up, by adding the Web. We realise the company likes controlling as much of the user experience as possible and boxing people in to Apple-supplied media. That’s helped make Apple products among the most useful and elegant in the consumer electronics industry. But the Apple TV is too confined. It should be more like Apple’s Mac mini, which some serious home theatre-types actually do use in their living rooms.
What does this mean? Add a Safari browser with all the plugins you’d need to watch videos from Hulu, MLBTV, NBC, ABC, Fox, etc., listen to audio from Muxtape, Last.fm, Pandora, and other sites that aren’t too directly competing.
In theory, this also means that Apple is eventually inviting iTunes competitors like Netflix (NFLX) or Amazon (AMZN) onto its box, since they offer browser-based video services of their own. But better to have to compete for space on your own platform than have a platform no one uses.
Add an optional Blu-ray drive. When Apple last updated the Apple TV in January, the the next-gen disc format war was just ending, which meant it was too late to add a Blu-ray DVD drive. But the DVD format isn’t going away for a while — at least for another 5 years or so. An Apple TV with an optional Blu-ray drive could replace the DVD player in every living room. An Apple TV without one is a compromise — there just aren’t enough movies on iTunes to make digital delivery a feasible, primary option today. Don’t forget that TVs have a finite number of hi-def ports, and the cable/satellite box — which Apple will increasibly compete with — is taking up one of them.
That’s it. For now at least — let’s not get ahead of ourselves. AppleTV doesn’t need too many features, and it doesn’t need to be a full-fledged PC. It just needs to make our TV-watching experience better, by adding as many video sources as possible, in one nicely designed package. What do you say, Steve?
Business Insider Emails & Alerts
Site highlights each day to your inbox.