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January 19th, 2007
"My experience has been that creating a compelling new technology is so much harder than you think it will be that you're almost dead when you get to the other shore."
-- Steve Jobs
There is a strong sense in the industry that the Apple iPhone will become a wild success. The most insightful article I've read on the matter comes from Time Magazine -- "Apple's New Calling: The iPhone." In the final paragraph of the article, Time quotes Jonathan Ive and provides one of the most profound and insightful conclusions about Apple that I've seen since Macworld.
When our tools don't work, we tend to blame ourselves, for being too stupid or not reading the manual or having too-fat fingers. "I think there's almost a belligerence -- people are frustrated with their manufactured environment," says Ive. "We tend to assume the problem is with us, and not with the products we're trying to use." In other words, when our tools are broken, we feel broken. And when somebody fixes one, we feel a tiny bit more whole.
And that, in a nutshell, is how the Apple TV will shatter the best hopes of Comcast, Time Warner, DIRECTV, and Dish Network, to name a few. To be sure, they'll all still be around in five years, but they will never achieve the growth and dominance they seek.
Allow me to explain.
The HDTV Industry In Denial
The HDTV industry in this country has some serious problems, problems that are similar to the mobile phone industry. Namely, some basic human needs have become both subverted and overwhelmed by technological greed and meddling.
In the case of mobile phones, the simple human need to communicate with another person has been turned into what amounts to, to put it politely, testosterone poisoned executives whose intention is to nickel and dime Americans to death. Each customer is a revenue stream to be entangled in an ever increasing need to push buttons. Perhaps text messaging your vote during an NFL game is the ultimate example of that kind of titillation, but the end result is a system that's broken. The iPhone will succeed, to everyone's eternal amazement, because it fixes something that's dramatically broken.
The iPhone will make us feel more whole.
Similarly, in the case of HDTV, we have many symptoms of a movie and TV industry that is going to get a lot more broken before it gets whole again. Here are just a few examples.
In other words, all the players are in a panic, everyone is circling the wagons, everyone wants to strike a deal that secures their position no matter what. No one has a vision, and if they did, they couldn't execute it because of the scratch-your-eyes-out competition.
Let's look at just a few of the problems Apple can address.
The cutoff date for analog TV transmissions in the U.S. is February 17th, 2009, a mere 24 months away. Yet the vast majority of consumers are still having a hard time understanding High Definition TV. I asked a salesman at a Best Buy store in Denver how much training they get on HDTV before they hit the floor. The answer: "Zero. Get out there and sell!" The general technical confusion, retail indifference, and carrier dirty tricks, in turn, demoralizes customers about the prospects for a happy experience in the management of their video library and viewing experience. If you doubt that, reflect on the Sears experience selling iMacs a few years ago.
Apple can't solve most of the industry's problems, but they can deliver on an easy-to-use system managed by Apple in all phases from purchasing through delivery to archiving and display. Apple can help their customers enjoy the content instead of struggling to deal with the pandemic in the industry. Customers are frustrated over their options, the quality of the equipment, and constraints that don't serve their needs. The biggest problems Apple can bypass are:
So where are we? Selecting an HDTV is hard, but the prospect of selecting a carrier and being subjected to their peculiar rules and constraints fills the bucket of frustration. Content providers abuse their customers with excessive DRM and the carriers mass produce the cheapest set-top DVRs for mass consumption possible. There's no funding or vision for something like Apple TV's software. Exclusive industry agreements make getting all the things you want impossible. You can't get the content you want on the display device you want, when you want it. Does that sound like a broken system? It does to me.
If It's Broken, Apple Will Fix It
Right now, all the attention is on the iPhone because mobile phones are so badly broken, and they're so tightly wired into our lives. So that's where the biggest pain is right now. But after Apple fixes the mobile phone industry, the HDTV industry is next on their agenda.
There is no such thing as infinite choice. The movie and TV (and Internet video) industries are going down a rabbit hole of undisciplined and extravagant choice. Each company who is a player has intentions of dominating a niche and establishing themselves in the market. Each player has visions of glory, but only a few will succeed because that's the way customers are. They tend to preferentially chose and that simplifies the market. And when the customers don't do it, mergers designed to eliminate irritating competition help things along.
The Macintosh, the iPod, and the iPhone form a coherent ecosystem. That ecosystem is stable and has a vision. As Jonathan Ive said of the iPhone, it fixes your problems and makes you whole. Apple will provide choice with coherence, DRM with grace, and content management that's a joy instead of a nightmare. And they'll do it with Mac OS X, AirPort, and Apple TV.
There is no doubt in my mind that I would rather have a Mac Pro with a terabyte of storage under my desk with a consumer class 2 TB external RAID 5 (they're coming) as my ultimate high-quality DVR. I'd rather transmit this content to an Apple TV, well engineered to drive my HDTV than be subjected to the lowest bidder, lowest common denominator, el cheapo set-top DVR that comes from the rusted racks in the Comcast warehouse. Or pay DIRECTV $300 for one and find out later, Oops!, if I want a great new feature, I have to buy a new one.
There is also no doubt in my mind that the collective minds of all the content providers and carriers will never be able to build a reliable content management system that is a joy to use. Intel Macs, Mac OS X and iTunes are better systems for managing personal video content than any software that's going to appear on a set-top box. Period. Without Apple, the HDTV customer in 2007 will be relegated to selecting the least of many evils, and they won't be very happy about their choices.
Apple TV is just the first of many products in that line. Like the iPod, it will get off to a slow start. There will be endless competing products and services that appear as if they'll relegate Apple TV to obscurity. Pundits will predict that Apple will never get a toehold in the industry. But in a few years, when the dust settles, the HDTV and video experience will greatly benefit from Apple's fix-the-problem skills in the same way they fixed the personal computer, its OS, the MP3 player, and the mobile phone.
The TV and movie delivery system in this country is now fragmented, fundamentally broken, and all too self-serving. I'm going to go with the company that makes me feel whole again. So will you. So will millions of others.
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
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