Apple Could Accidentally Disrupt the Entire TV Industry [UPDATED]

| Particle Debris

Sometimes, companies lay plans to succeed and they don’t work out. And then something totally unexpected comes along that succeeds without any apparent effort. Could Apple be on the cusp of turning serendipity into total disruption? A hobby into an extravaganza? Plus, we dig deeply into Apple’s sandbox and take a look at how a mathematical law could be poised to impact Apple’s growth.

The End of The Hobby?

This could be very good news for Apple. A study found that “63% of people who recently watched TV on a tablet said they used a tablet even when they had access to a TV with similar content available,” according to a study from research firm Chadwick Martin Bailey.

Also, CNET’s Steve Guttenberg elaborated on the idea late last year. “I’m not claiming sales of big-screen displays will go to zero, just as sales of big speakers haven’t completely gone away. There will always be a market for big TVs, just as there is for great audio, but big-screen sales will continue to shrink over time. Most people will be perfectly content to watch movies and sports on their iPads. After all, when you’re sitting up close to an iPad the picture can take up a large part of your field of vision. Plug in a decent set of headphones, and the sound will be fine. Ditching the big display that’s hogging too much real estate in your living room will start to seem like a great idea.”

What’s going on? I think there may be several factors. First, home HDTV systems can be complex — heaven for the geeky videophile husband, a nightmare for everyone else. An iPad is so much more approachable. And it’s controllable and predictable. You just touch the Netflix or the TNT app, for example, and you’re watching your favorite show. It’s also intimate. As Mr. Guttenberg pointed out, an iPad in your lap can subtend roughly the same visual angle as an HDTV from a reasonable viewing distance. So why not curl up, plug in the headphones, and have immediate touch control with no remote needed? My wife does this.

The question is, is there something going on here that Apple can cash in on? Besides just more iPad sales? Is this a point of failure in the TV industry that Apple can exploit?  As Tim Cook has said, they just keep on with the Apple TV (and iPad) until they find something good happening. Serendipity has been known to strike, especially in situations like this.

What if, someday, we all watch TV on a 15-inch iPad and Apple severely undermines the entire HDTV industry? What if the move towards social isolation brings an end to the family viewing concept? It’s actually already happening in college dorms and apartment families. Stranger things have happened in technology. I sense that this is just one idea brewing in the halls of Apple, and it could mean we were all barking up the wrong tree if we thought Apple would go toe to toe with Samsung, Sharp, LG, Vizio, Panasonic and Sony and build it’s own HDTV without immutable content deals.

[UPDATE: But wait. There’s more.  Friday night, USA Today published this survey of all the new technolgies and social networking that are changing our TV habits. Apple will be aware of these as well. “Roundup: Latest gadgets that are changing TV.” Food for thought here.]

Family TV viewing

A long gone era

Playing in Apple’s Sandbox

I have written lately about Apple’s sandboxing initiative for developers. If you’re not quite sure what sandboxing is, it’s probably time to research it. It will affect your future with the Macintosh, and it’s already in place in iOS. Here’s an excellent summary by Erica Sadun of what’s going on the Apple, sandboxing, and developers: “App-ocalypse soon: Apple extends sandboxing deadlines, but restrictions loom.”

Here’s another take from an expert OS X developer, Daniel Jalkut of Red Sweater Software. He believes that Sandboxing would be okay if Apple just took the right approach. “Fix The Sandbox.

Speaking of iPads and Ms. Sadun, I have a bet with her that Apple will release an iPad with a smaller display before Dec 1, 2012. The murmurs and rumors are all over the place. Of course, testing doesn’t mean a commitment to ship, but… If I lose, I buy her lunch. You’ll just have to wait to see if I have to pay up in December or earn an early win.

Extras

People often ask me what app I use to read magazines on my iPad. I use Zinio, but I’m ready to spring for something better in an instant. If you’re also wondering, here’s a convenient summary that sizes up the magazine management apps for iPad: “Comparing Zinio, Kindle and Newsstand apps for iPad magazine reading.” The survey could be much more detailed, but it’s a start for the beginner or the curious.

From time to time we hear about people who are accused of a crime and found to have encrypted their hard disk. In many cases, they’ve been coerced into providing the decryption key or face contempt of court ruling and go to jail anyway. Recently, a federal appeals court in FLorida ruled that being forced to produce the decryption key is tantamount to self-incrimination under the 5th Amendment to the U.S. Constitution. It’s a good thing to know about, but doesn’t apply everywhere. A similar court case is underway right here in Colorado. Here’s the story: “Appeals Court Upholds Constitutional Right Against Forced Decryption.

Recently, Apple’s CEO Tim Cook was asked about the “law of large numbers.” He declined to go into details, but seemed to be aware of the mathematical law that could end up limiting Apple’s explosive growth. Here’s more detail from the New York Times that explains what’s going with some technical detail, but still very readable by the layman. “A Law Apple Would Like to Break.”

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Comments

James

Maybe the ultimate Apple TV is a DVR like device that captures your tv and movies and allows you to stream them to your iPad

bud

Airplay is not going away. No matter how big they make the iPad air playing to the HDTV is where it’s at. This goes for games, movies and extends tot he desktop in Mountain Lion. Apple doesn’t need to build a TV because their products compliment the TV, not replace it.

Lancashire-Witch

“....  So why not curl up, plug in the headphones, and have immediate touch control with no remote needed? My wife does this….”

Because in my part of the world Netflix isn’t available and TNT is a shipping company. That’s ‘why not’ for me.

Even though there are differences in content in iTunes from country to country, music is pretty well universal. Hence the success of music. Over 84% of my music library ‘matched’ when I turned on iTunes Match.

TV certainly isn’t universal. Movies are a little more universal but the Apple’s prices are crazy. Add in the WSJ and baseball and the current AppleTV is still only an extension of iTunes in my location.

I don’t bother with iBooks. There are no books for sale on my local iTunes store.

Move away from music and the challenges posed by the regional differences are not trivial when it comes to consuming content on the iPad or Apple TV.

Apple may be the world’s largest company but on the other side of the world, even in an English-speaking OECD country, it doesn’t have the look and feel of a global company. My nearest Apple retail store is over 3 hours away - by plane. That looks like a continued growth opportunity to me.

iJack

@ Lancashire Witch, Surely you have something equivalent to Netflix and/or television streaming 24 hours later.  Doesn’t the BBC offer this, or Sky?

Lancashire-Witch

@ Ijack.  I’m not currently in the UK.  My comment related to New Zealand.  I know there’s a movies-by-mail company operating here and subscription satellite TV operates much like everywhere else, as do the brick-and-mortar DVD rental places. TV company websites offer TV-on-demand aimed at the “missed an episode?” customers. TiVo is available here now. TV Shows are not offered through the NZ iTunes Store.

Will

Good point, LW. It’s a pretty large world and plenty of neighbourhoods that still don’t sport an Apple Store. And China is huge and standards of living are rising. And like others in aspiring middle classes, will save a little longer to get something Apple.

World wide single digit sales in its main products means there’s a lot of room for Apple growth and then, as China’s population ages, oodles of youthful Indians will be at the point to take up the slack at their Apple Stores in a nation that is expected to surpass China in numbers round 2040. But youth wise, we’re talking staggering middle class growth into the 2020s and we’re still early in the decade that predates the double twos so there is plenty of growth time ahead for our friendly fruit company in China before India kicks in. Thus times won’t be a changing in this food ration anytime too soon.

aardman

There’s a problem with applying the law of large numbers in a real world business setting.  Actually it applies to pretty much all probabilistic methods.

See most of these statistical ‘laws’ and rules of thumbs that we use are built on the assumption that the underlying random process consists of repeated runs of identical probabilistic experiments.  i.e. as simple as flipping a coin, as complex as the earth’s weather system.  The coin doesn’t change as you keep tossing it.  It’s the same earth, the same atmosphere, and the same solar system and galaxy that drives the weather today and next week.

But that is not true in an industry like high tech where the underlying random process is not fixed.  In particular, the stock of technological knowledge is constantly changing.  So these are not repeated identical experiments in the classic probabilistic sense.

Now one can say, well eventually Apple’s growth rate will slow down because they will run out of people to sell iPhones to.  That might very well be true, but that’s not the law of large numbers in action.  That’s a perfectly reasonable prediction based on a forecast of market saturation.  That prediction can be easily overturned by the successful development and introduction of a new product based on a new technology.  I say only a fool would claim that the random process that consists of discoveries of new technologies are repetitions of identical probabilistic experiments.

Grey02

There wouldn’t be an AppleTV but AppleTV.

ThInk ecosystem.

Mikhailovitch

Aardman is exactly right. The Law of Large Numbers applies only to random events. The New York Times writer must think that Apple makes business decisions by rolling dice. I’m not for a minute suggesting that Apple’s growth can’t stall or reverse -  but it will have nothing to do with the Law of Large Numbers.

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