Apple TV 2.0

We’ve been getting a TON of recon on the Apple TV, and we know it’s not so sexy as to talk about tablets and so forth, but feel like this is worth reporting on nevertheless…you can be the judge…

Let’s paint a picture, shall we? See if you recognize this one:

  1. Introduce a new device and price it at a premium (since you know you’ll sell as many as you can make at first, anyway)…
  2. Cut the price once R&D has been recouped…
  3. Once the market penetration has started, introduce new features, services, etc. tied to the platform…
  4. Profit (okay, so it’s a four step instead of three step plan like in South Park)

Do you remember the last time we saw that formula? Yep, the iPod…which lead to the iTunes store, which lead to complete and total market domination by Apple. Recon looking forward to Apple TV 2.0 suggests a similar path in place (only this is a five-step version of the above):

  1. Introduce Apple TV, sell it for $300 (already done)
  2. Cut the price for Christmas 2007 to $199 and MOVE UNITS
  3. Macworld 2008 – Introduce a firmware upgrade that allows direct purchase of content via iTunes (no computer needed)…also other video sources, like YouTube…and also video games (complete with a wireless controller option)
  4. Introduce one more upgrade that turns your very large install base into full fledged IP TV users…tied not just to things like iTunes and YouTube, but also directly to cable providers (and potentially content providers themselves, thus cutting the cable folks right out of the business)…thus biting Microsoft in the @$$ again while they were trying to get their act together on IPTV with whatever BS they are doing with their mishmash of approaches…
  5. Profit & completely dominate this market, too.

The end? Probably not, there is even more up Steve’s sleeve than this, but we wanted to get this out there for everyone’s knowledge…to be clear, this is a combination of tips and reports, along with our usual commentary and analysis. Do you see it going another way? Sound off in the comments or

And as always, don’t forget to give us a DiggDigg!


36 Responses to Apple TV 2.0

  1. […] TV: From Podvision To Stevevision Those guys at Apple Recon are good: Apple TV 2.0. […]

  2. berad says:

    >tied not just to things like iTunes and YouTube, but also directly to cable providers (and >potentially content providers themselves, thus cutting the cable folks right out of the business)…

    So you can purchase from the cable providers which cut them right out of the business? I’m confused.

  3. astromoose says:

    I think microsoft is going the wrong way with their IPTV strategy by relying on cable providers for content. Apple’s plan is at least a step in the right direction even though it appears to be a frustratingly closed system; hopefully there will be a way to trick it into playing other formats. I definitely think they will make it into something better than it appears to everyone today. “USB port is for service use only”, yeah right. I wonder how long it will take them to integrate googlevideo/youtube.

  4. Aga says:

    Applerecon… here’s some MicrosoftRecon…

    I believe Microsoft will stay in the game as long as the game stays in the Xbox. See, there’s not a huge difference in price between the AppleTV and the Xbox… considering what you get, though both are targetted at different markets. I believe AppleTV is in a better position for market penetration, and the best feature they could add to it would be iPod games… that, would hook a lot of house folk. anyhow, go check it out, you will see, Xbox and AppleTV are both IPTV type devices.

  5. alex says:

    I think also the Desktop so you can access your Mac OS in the TV. Except I think there must be some inovation on the input side.

  6. dawdas says:


  7. Justin V says:

    I also think big things with Apple TV. The Above would mind blowing. I’ve been telling folks, that Google and You Tube would join forces with Apple (single google is on Apple’s board and all). Not sure about the IPTV, the rural folks are still stuggling to get DSL/CABLE. Video games would be great,.

  8. CRB says:

    I think charging for upgrades or firmware (like the aiport update) will also be a part of the plan, unfortunately. So see an upgrade on features down the road with a fee.

  9. macrebuff says:

    wow! so much for the cable companies! i guess they’ll just roll over and let anyone cut them out of the biz. oh, wait, maybe they’d be more likely to continue in their efforts to halt any venture that poses even the slightest threat. can’t wait to watch youtube in HD!

  10. Steve Sabol says:

    Apple doesn’t have a habit of releasing feature-enabling firmware upgrades to their iPods. Their strategy is to make the product you have obsolete. I’m not saying this is a bad thing from their perspective.

  11. lars says:

    Do you guys just make this sh!te up while in the shower and then post it to the site, or do you actually have any sources for your “information”?

  12. Bob says:

    Another thing you can bet it will do, either in its first release or soon thereafter, will be the ability to run a Mac into it and then view the Mac desktop on an HD monitor.

    I got to fool with an AppleTV at MacWorld Expo and was very impressed–I ordered one that day. Since I use a Mac Mini in my stereo cabinet, without an attached monitor, this will give me a way to see my Mac Mini’s content on my plasma TV without having to resort to Timbuktu, which is what I do now. If they make it possible to route the Mac Mini’s monitor output into the ATV, I’ll really be happy.

  13. Aaron Lewis says:

    Interesting post. Regarding the comment confused about how the cable providers are cut out – the article suggests Apple would get content DIRECT from content providers (i.e. movie and TV studios) avoiding the middle-man of the cable companies. This is plausible, but requires a whole new IPTV system that isn’t in place right now, and is slightly hard to imagine not be cornered early by the cable companies which have already made some progress. But it’s pretty interesting.

    The other comment I wanted to make was to Bob – why do you need Timbuktu? Does your plasma TV not have a VGA or DVI input?

    This is a confusing item to me for many people who talk about Apple TV – for those who don’t mind getting their mac within a cable’s length of their TV, and have a modern TV, they can already view everything on their mac on their TV.

    I take my 12″ PB G4 and hook it to my TV when I want to show off Movies/Photos/etc – the TV is immediately recognized – and I’m just using crappy composite RCA cables (and the $19 DVI to composite Apple Adapter). If I bought a newer TV, I’d connect to VGA or DVI and the picture would look that much better.

    So to me, if you already have a mac with a video out port, the only benefit of Apple TV is high speed wireless connection to your TV, and you don’t have to move your mac next to your TV…Bob already has his mini sitting next to it!

  14. Tim says:

    Personally, I don’t find AppleTV that interesting as it currently exists. I probably wouldn’t look to buy one until it reaches step 4 in your projection, when it becomes an IPTV platform. That’s certainly an interesting scenario. But I have to wonder, will cable companies and phone companies, the two types of entities who own virtually all the broadband connections in our homes, stand by and let Apple do an end run around their own TV services? The cable companies, of course, offer TV service over their cable lines and phone companies such as AT&T are already rolling out IPTV over their phone lines in some areas. Would they allow a direct competitor to offer TV service over their connections via the public internet? Would they legally have to allow this? That doesn’t seem quite fair to them. And would it be technologically feasible to offer a quality IPTV service via the public internet? Video is VERY bandwidth intensive, particularly HD video.

  15. Graybaby says:

    The cable companies (TW, Comcast, etc.) saw this coming years ago which is why they got into the cable modem business in the first place. They knew internet delivery of television content was inevitable, and planned for traditional cable eventualy going obsolete.

    Cable gets hurt by no longer providing you with traditional television and VOD offerings, because you’ll be able to get content directly from the creators (HBO, Bravo, MTV, whoever). Traditional cable companies will endure, because you’re still paying them for that pipe into your house. Watch as traditional cable declines, they’ll begin offering upgraded bandwidth (necessary for HDTV content) at a premium price from your existing cable modem rates, all in order to offset losses as a result of the change in content delivery.

    It’ll all be great fun.


  16. vkilla says:

    More power to them. I don’t own any apple devices except for the iPod. But like everything they came out with the last two years. My new upgrades will definitely be Apple products.

  17. astromoose says:

    tim and graybaby,
    i agree this is what is going to happen, there is no way cable providers are going to be able to maintain a lock on the content although they will for sure find a way to make money somehow being the primary data pipe to many peoples homes. this article on anandtech from a few weeks back makes some very good points:

    to give you a couple of quotes:

    “From Microsoft’s Xbox 360 IPTV announcement and the iPhone to AMD’s new form factor, it’s all part of a much bigger picture that will impact all of our lives.”…..”For years the PC industry was fighting for convergence, trying to get its side of the technology powerful and polished enough to actually support and drive consumer electronics devices in the home. That part has happened, now it’s more an issue of who is going to do convergence right, and this question is far less dependent on simply getting more powerful hardware on your network. “……..”All of the major players want to be the one to figure out the model that works the best so that they may capitalize on convergence. Until one of them figures it out however, we’re bound to see many failed attempts at connecting the digital home, and many attempts that only bridge half the gap. “

  18. […] sure how reliable Apple Recon when it comes to Apple related news and rumors, but they have just woken up to the fact that Apple TV could very well disintermediate the television networks and the cable […]

  19. Jason says:

    Can anyone explan to me WHY I’d want an AppleTV??? I stream my Itunes music library to my stereo / tv via my xbox360 – not to mention 1080p video through the 360 to my Samsung 1080p DLP. WHY did Apple wuss out at 720p?

    I’m as big of an Apple fanboy as their is – but the only thing I see this appliance doing is allowing you to play iTunes purchased stuff on your TV. NOW – if Apple would allow you to rip your existing dvds to a file, and stream THAT content – we might have something… Everyone would need a terrabyte in their media rack, though…

    Wait a sec… With Wireless-N, wouldn’t that let you “borrow” a movie from a neighbor?? Now we’re talking!!!


  20. fifthdecade says:

    Microsoft aren’t just going for cable content – in the UK they have made a 2 year exclusive tie up with the BBC which they haven’t had to pay for but which cuts Apple and Linux out completely. I’ve posted more about that on my blog, including links, contacts and analysis.

    As for Apple’s TV thingy, I am as disappointed as Jason that it isn’t 1080p. I was all set to buy it, but it now seems no more than an expensive adaptor for videos bought at the iTunes store that allows them to be viewed on your TV instead of your monitor. Maybe that’s why it only got five minutes at the recent MWSF show.

    What a lost opportunity.

  21. CW says:

    I have Airport Express. It’s okay but I have go to my Mac in my home office, start iTunes, select a playlist, select “Airport Express” as the remote speaker, and then start playing a song. Only then can I can go back to my living room and enjoy my music!

    Apple TV allows me remotely access iTunes and start enjoying my music right away. Plus the added advantage of watching TV shows. I must admit I rather buy a DVD than buy a movie from iTMS. If these additonal features are indeed made available than that is just icing on the cake.

  22. Johnny Appleseed says:

    Incidentally, it should be “led” to the iTunes store, and “installed” base.

  23. Jason says:

    fifthdecade – Exactly. It’s “an expensive adapter for videos bought at the iTunes Music Store.” (PS – Read your blog – nice work!)

    Again – I’m a BIG Apple fanboy, but I jsut don’t see the need for this appliance.

    Someone tell me otherwise – I’m typically the ‘early adopter’ in my peer group, and I need to know if I should get this thing…

  24. Graybaby says:

    Anybody know if AppleTV will function as a network range extender like the Airport Express? Wondering if I can use it to replace the Express I’m using downstairs to both hook up to my stereo are to extend the range of my network.



  25. fifthdecade says:

    Thanks for the compliment, Jason. It’s a new blog so I’m hoping word will spread – Gigg me, del, me too if you can!

    I was hoping the Apple TV was going to allow me to buy a 1080p video camera, edit the output on my Mac, and then stream the finished output onto my 1080p TV.

    It seems I was more ambitious than Apple.

  26. Stephen says:

    Interesting noone’s talking about Sony in this thread…in my opinion, they’re well placed to get in on the action – they are way more mass market than Apple are right now and they already dominate in the world of consumer goods. How much would it take for them to bring out a device that tied their products together? (For the record, I don’t know too much about Sony…)

    I so so so want Apple to join up all of the bits – but any device that I put under my TV or in my living room, I want to be able to access at work, on the bus (on my phone). That way, I can put all my digital stuff in one place and then share it with whomever I want (DRM allowing of course : )

    Nice blog…

  27. iskander says:

    step one: steal underpants

    step two:

    step three: profit

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