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Can Apple TV Compete With Media Center?

If there’s any part of Steve Jobs’ keynote yesterday that didn’t make sense, it was the now-called Apple TV, a strange media extender designed to stream iTunes content from Macs and PCs. The strange part: The entire market, every single computer company, is designing products like this, and down the line, every single offering, from the Xbox 360 to Media Center Extenders to media receivers to VAIO PCs to VIIV PCs to strange single-company brands, every single offering is more powerful and versatile than the Apple TV.

Why?

Why would Apple release a product that, straight out of the gate, is basically dead last in terms of features? Especially when it has proven with the iPhone that it prefers to be ahead of the pack in features, no matter how much the damn thing costs! It’s a strange release for Apple, one that doesn’t fit with any rational competitive strategy for the living room.

Chris Lanier lists the Apple TV specs, and in every part of the list, it seems like Apple actually chose to offer less than it could have:

  • 720p HD output - this when 1080p (not even 1080i) is being pushed by HDTV makers as true HD. Worse, many TVs only display 1080i and 480p, and don’t upscale well to 1080p. Some of them (mostly Sony TVs) actually downscale to 480p, meaning Apple’s 720p loses 240 lines of resolution right out of the box.
  • Ouputs - HDMI and component. I almost have to ask what the point of the HDMI is, when you don’t have a resolution that can benefit from it? If I have one HDMI port, you think I’m wasting it on an iTunes Extender in 720p?
  • 40-gigabyte hard drive - For storing iTunes content. While I like the idea of storing some content locally, so that it doesn’t have to stream from the PC, this kind of defeats the purpose. If you are connected via wired ethernet from the PC to the Apple TV, this becomes utterly pointless (and yes, most people are still going to use wired, regardless of how much products with wifi the market offers). Why store content locally on a media extender, and even then, not have enough hard drive space for all of your content? Doesn’t that defeat the purpose?
  • File formats - this has to be the most dissapointing part, because the slogan is “If it’s on iTunes, it’s on TV.” Wrong, because the Apple TV doesn’t support a bunch of file formats that iTunes does. On video it only supports H.264 and MPEG-4, and even then only Simple Profile, which locks you out of watching DivX and XviD.

Microsoft’s Media Center is inspiring a whole community of people to spend on more than just the typical commodity PCs, people who drop their cash on quad TV tuner systems with terabytes of hard drive space, wire their house with gigabit ethernet, plunk a home server next to the router, insist on higher-quality outputs, CableCard PCs, home automation and stream everything to everywhere in the house, all paying a pretty penny.

There are only two explanations, logically. The first is that Apple is not interested in fighting the war for the living room, just satisfying its customers. Apple has no interest in spending huge amounts of money to fight more established home entertainment companies to design perfect media hardware and software. They reason that if users want that, they can buy it elsewhere. Instead, Apple TV is just a gift to its current customers, a simple way to stream from iTunes to the TV, and just basically another iPod peripheral. In that case, it does its job, albeit for a little more than it is worth and with a few strange decisions.

The second possibility is that Apple wants to win big in this area, but is willing to wait for the software to be ready. It is slowly seeding hardware all over the place, putting Apple PCs that look like TVs and Apple Cinema Displays in homes, selling Front Row without the media center functions users expect, putting Apple Remotes in almost every box and Apple TV extenders in many homes. The point of it all is to have the hardware ecosystem in place when Apple launches the “real” Front Row users have been waiting for, an application that does at least as much as Windows Media Center does, while upgrading the Apple TV to handle more video and output formats. If that is the plan, Apple is more devious than I give them credit for.


Brandon calls Apple TV the Apple version of the Zune, “just a few steps short of being a really good competitor”.

Ars calls the $300 price a little high for what is basically a non-portable 40-gig iPod with an HDMI connector, and that the market has been putting out more mature products than this for years.

Scoble says the entire industry is ahead of Apple, and calls it “Xbox without the ‘X’”. Tis true, given that it costs the same as an Xbox 360 Core, and doesn’t play games or go online. Hard to argue innovation or price value when a little plastic $300 box is going up against a $300 box with a powerful CPU and graphics engine that plays amazing games and throws in the media extender feature as a bonus (a bonus with more features than Apple TV).

January 10th, 2007 Posted by Nathan Weinberg | General, Windows, Media Center, Apple | 3 comments
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3 Comments »

  1. Pretty selective (I mean extremely) to leave out the 802.11N networking, isn’t it?

    Comment by Time | 1/10/2007

  2. Nathan, you said:
    “Microsoft’s Media Center is inspiring a whole community of people to spend on more than just the typical commodity PCs, people who drop their cash on quad TV tuner systems with terabytes of hard drive space, wire their house with gigabit ethernet, plunk a home server next to the router, insist on higher-quality outputs, CableCard PCs, home automation and stream everything to everywhere in the house, all paying a pretty penny.”

    That’s pretty small group of enthusiasts you’re referring to. Home media center’s haven’t caught on mainstream yet, and I feel Apple is aiming for a sweet spot in terms of providing a way for current iPod/iTunes users to extend their collections to their TVs without the hassle, investment, and technical expertise needed to really implement what you described above. They aren’t trying to match Media Center’s in terms of features - my guess is they don’t think most consumers want or need all those features. They want simplicity.

    Comment by Kevin | 1/10/2007

  3. Well, if they were mainstream, they wouldn’t be called enthusiasts :-)

    No, you’re right, the Media Center market is taking time to catch on, but it is an area ripe for the picking. Someone is going to make billions off that market, and right now Microsoft is building an ecosystem that seems to be working, and will only be accelerated by Vista.

    As for the Apple TV, my points in the article agree with yours, that Apple is like releasing Apple TV not to get new users, but to better service current iTunes users, without the hassle. Millions of iPod owners use iTunes, and Apple is hoping to sell an overpriced but well-designed accessory to a portion of them, or at least a portion of those who have bought from the Video Store.

    Comment by Nathan Weinberg | 1/11/2007

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