Analyst: Apple Ready to Lead In the Digital Living Room
Analyst: Apple Ready to Lead In the Digital Living Room
by , 7:50 AM EDT, March 16th, 2007
AppleTV hasn't shipped yet, but Piper Jaffray analyst Gene Munster thinks the home theater box is already poised to steamroll over Microsoft's Media Center. He commented "We believe iTunes is a Trojan horse media center, which will give Apple a significant early lead in the digital living room."
Mr. Munster estimates there are about 110 million iTunes users - the key market for AppleTV. In comparison, there are only about 12 million Windows Media Center users, even though the software is pre-installed on about 23 million PCs. Based on those figures, Apple already has a 10x head start over Microsoft in gaining control over digital home entertainment.
"With a wireless media streaming device simplicity is key, and Apple carried its focus on simplicity to this product," he said. "During our tests of AppleTV at Macworld we found it very easy to use with a simple remote and intuitive navigation."
That ease of use will likely translate into sales for Apple. Wall Street is estimating Apple will sell 4 million AppleTV units in calendar 2008, generating about US$1.2 billion in revenue.
Mr. Munster is rating Apple as "Outperform" with a target price at $124. Apple is currently trading in the pre-market at $89.40, down 0.17 (0.19%).
If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.
Observer Comments
Fri Mar 16, 2007 8:40 am Subject: It would appear...
that GM is correct about this. It would also appear that Apple TV is taking a back seat to the iPhone but may be much more important in the short and maybe even the long term for Apple. I have read that there are many high end video installers that are looking to Apple TV as part of the solution for home theater.
Neal
Fri Mar 16, 2007 2:30 pm Subject: What it competes with
Ease of use isn't going to win on its own in the living room. My grandmother can flounder her way through buying a movie on demand or playing a DVD. She can even record her favorite shows with an HD DVR. There are other ways this Apple TV thing must compete to become dominant.
1. It's going to compete for an HDMI input for the next 18 months or so until TVs at the low end come standard with 4 or 5. It competes against DVD player, cable/satellite box, and game consoles. If it integrated a progressive scan, upscaling DVD player, it would fare much betetr.
2. It's going to have to provide HD, widescreen content. Cable customers are starving for HD, widescreen content on demand.
3. The content needs to get onto the box fast. Cable boxes can start movies on demand any time. Apple TV requires a download and install of a 1/2 GB file for 1/2 hour show in SD.
4. Content needs to be priced competitively. On (2) and (3), I can get most movies on my cable box for $4 for 24 hours and they play instantly, some widescreen, but none in HD. $10 for a movie from iTunes that takes hours to download on DSL and is same picture quality isn't a great deal.
5. Needs to compete with DVR. DVR is easy enough for most to set up. Buying shows from iTunes has advantage of being commercial free, but is a more complicated process. Also, usually must wait a day or two for show to become available.
Hey, I bought one of these things and can't wait until 21-Mar when I'm supposed to receive it. But until I see how it plays with and against all my other gear, I'm skeptical about its power to dominate the living room.
Fri Mar 16, 2007 6:05 pm Subject: Mostly agree with Bosco -- YIKES!
QuoteBosco wrote:
Ease of use isn't going to win on its own in the living room. My grandmother can flounder her way through buying a movie on demand or playing a DVD. She can even record her favorite shows with an HD DVR. There are other ways this Apple TV thing must compete to become dominant.
1. It's going to compete for an HDMI input for the next 18 months or so until TVs at the low end come standard with 4 or 5. It competes against DVD player, cable/satellite box, and game consoles. If it integrated a progressive scan, upscaling DVD player, it would fare much betetr.
2. It's going to have to provide HD, widescreen content. Cable customers are starving for HD, widescreen content on demand.
3. The content needs to get onto the box fast. Cable boxes can start movies on demand any time. Apple TV requires a download and install of a 1/2 GB file for 1/2 hour show in SD.
4. Content needs to be priced competitively. On (2) and (3), I can get most movies on my cable box for $4 for 24 hours and they play instantly, some widescreen, but none in HD. $10 for a movie from iTunes that takes hours to download on DSL and is same picture quality isn't a great deal.
5. Needs to compete with DVR. DVR is easy enough for most to set up. Buying shows from iTunes has advantage of being commercial free, but is a more complicated process. Also, usually must wait a day or two for show to become available.
Hey, I bought one of these things and can't wait until 21-Mar when I'm supposed to receive it. But until I see how it plays with and against all my other gear, I'm skeptical about its power to dominate the living room.
For once, I'll mostly agree with Bosco, with a few modifications:
1. I was in a local video store yesterday, looking at 42-46 inch flatscreen TVs. (I can't fit anything larger than that into the space I have available at the moment.) The number of HDMI inputs was part of my criteria. Most at that store had 2-5, most had 3. These aren't the "low-end" sets but Toshiba, Sony, Samsung, and one or two other brands. I haven't taken the time to go to Circuit City to check out the cheaper models.
2. The Apple TV does provide HD widescreen output at 720p, at least. That fits with most of the less expensive (and many higher priced) sets I saw. I have Comcast cable, which DOES provide HD programming on demand, including about 30 movies, some sports and other shows. It's not much, but it has been rapidly increasing.
3. That's not that big a limitation because of the internal hard drive in the Apple TV. It's true that one will have to plan ahead a bit, but not as much as to buy or rent DVDs.
4. Yep, especially when one can rent a DVD for much less.
5. DVR: It depends. TiVo is apparently fairly easy to use, but expensive over time. I use a DVD recorder with HD, but there's no programming guide and one must input programs pretty much as with VCRs of yore. The big advantage, though, is that it's easy to make a DVD of most programs (those that aren't set to prohibit recording). Full seasons of TV shows on the iTunes Store are as much as or more than DVD sets bought at discount sites, but they're available sooner. They're a good way to see shows I missed.
I would like to see Apple TV function as a DVR, like the Elgato and Miglia products, but that would increase the price quite a bit. Right now, it should be possible to use an EyeTV or Miglia product with iTunes and Apple TV.
The top-of-the-line Sonys (XBR2 and the super pretty XBR3) have 3 HDMI inputs, with one at the side where it isn't so discreet. For LCDs, the 40/46 inch XBR2/3 blow everything else away. Order from Crutchfield if you want price competitive with stores and A++ service. Order from Abes of Maine if you want to save $800-$1200 but want the risks of ordering from a bottom discounter.
At the low-end, go to Costco and check out Vizio. These usually have 2 HDMI ports and are the best value going for people making the initial jump to HD. $900 is about the top end of the low end where most people who just want to watch are comfortable buying TVs. Coincidentally, it's also all you need to spend to get the most out of what's widely available today (720p). $800 is a real sweet spot, and Costco has it cornered with the Vizios.
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