Tim Cook Telegraphs Apple Television Plans at D10

| Analysis

Telegraphing Apple's PlansApple CEO Tim Cook has been working on his Morse Code, judging from the talk he gave Tuesday night at AllThingsD’s D10 conference. Among the many things he talked about, Mr. Cook gave us more information about his company’s plans for a television set, if you don’t mind decoding the dots and dashes.

D is the name of AllThingsD’s annual technology conference hosted by Walt Mossberg and Kara Swisher. The conference features tech industry leaders talking about their companies and the industry as a whole, including sit-down sessions with Mr. Mossberg and Mrs. Swisher. The late Steve Jobs spoke at several events, and this marks Tim Cook’s first appearance at D as CEO of Apple.

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One of the best lines of the talk came near the beginning, when Walt Mossberg asked Tim Cook what was coming at the company’s World Wide Developers Conference in June.

Mr. Cook quipped, “That’s a great question. I’m not going to answer it.”

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The conversation eventually wended its way to television sets, and Walt Mossberg took a very clever tack on asking about Apple’s much-rumored plans for this industry. According to Ina Fried’s live coverage of the event, Mr. Mossberg asked, “Hypothetically, can TV be improved with just a box and leaving the panel to others?”

We characterize it as clever because it’s not the kind of question that would necessitate a “no comment” from an Apple executive, and Tim Cook took the opportunity to offer what we took as all-but confirmation that his company will be entering the market with a full TV set.

“We would look not just at this area,” Mr. Cook said in response to the question about settop boxes and panels, “but other areas and ask can we control the key technology?”

He added, “Can we make a significant contribution far beyond what others have done in this area. Can we make a product that we all want…Those are all the things we would ask about any new product category.”

Kara Swisher asked a follow up question of whether or not Apple’s current Apple TV is “good enough.” Mr. Cook said, “It’s more something where you keep pulling the string to see where it goes.”

To us, this clearly says that Apple doesn’t see settop boxes as the end-all, be-all for that industry. The company currently makes a settop box called Apple TV, and Mr. Cook is saying that if Apple is going to make a bigger foray in TVs, it will need to be able to take more ownership over the customer experience and the product, and that most likely means making a full television set.

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This follows from other hints Mr. Cook has given us in the past. For instance, in January of 2010, he very clearly stated that Apple would compete with netbooks not by making a netbook, but rather by taking a product that already met some of the needs of the netbook (iPhone) and expanding it. We know the end result today as the iPad.

Looking at the comments above about a TV in the same light leads us to conclude that Apple uses its current device as a way of understanding how consumers consume their TV, and what else they might want from it.

Furthermore, the “pull the string and see where it goes” line strongly indicates that there is a place to go. In that Apple has long found it key to own some portions(s) of whatever products it makes, at the other end of the string must lie an actual set.

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As we were preparing this analysis, Mr. Cook offered up another clue by saying that he thinks Apple will be a bigger player in the world of games.

Mr. Cook said, “I view that we are in gaming now in a fairly big way. One of the reasons people buy an iPod touch is gaming. Some buy it for music. I realize that is not the big screen you are talking about. Gaming has kind of evolved a bit. More people play on portable devices. Where we might go in the future, we’ll see. Customers love games. “

More importantly, he added, “I’m not interested in being in the console business in what is thought of as traditional gaming. But Apple is a big player today and things in the future will only make that bigger.”

When someone in the audience asked about the TV in terms of gaming, Mr. Cook said, “I think it could be interesting.”

There’s much more in AllThingsD’s live coverage, and the video of the interview will hopefully be posted Soon™.

Comments

skipaq

I read a transcript of the Cook interview and it screams there is something coming on the TV front. It is also clear that the end product is not a set top box. “Control the key technology”  and “Doubling down” on product secrecy are Apple’s way especially when working on something new.

geoduck

This is a Rorschach test.

If you believe Apple will make a TV then what he said confirms it.

I don’t so for me it doesn’t.

I see a lot of coy answers that disclose very little. I see hints that Apple might have something in mind, even in the pipeline, (no big surprise, Apple is always has new products in the pipeline) but nothing to indicate what it was.

But then I’m excruciatingly bad at picking up subtle hints. Just ask my wife.

txaggie90

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ctopher

txaggie90 - I can’t quite understand your fist. You don’t think they’ll ship a screen?

But Brian, I agree, it’s all about the games! (Who are you calling Stupid?)

Bryan Chaffin

Not bad for an Aggie, txaggie90! :D

I think the key to the disruption issue is whatever Steve Jobs meant by having finally “cracked it.”  That coupled with Mr. Cook’s comments about owning a key technology will be the disruption point.

I won’t pretend that I know what those things are, but this is why doing this sort of thing is so hard.

ctopher, note that I was just channelling Steve Jobs channel Bill Clinton. smile

txaggie90

ctopher.  No, I don’t think they will produce a screen.  At least not as the primary component of what they have in mind. I know it has been mentioned elsewhere before and I’m not adding nothing new to the conversation, but the following reasons are why I don’t think they will.

1.  It’s a low margin business.
2.  Most people already have their own screen with no plans to update soon.
3.  The screens have a relatively long life before obsoleteness.
4.  Apple would have to produce a wide variety of screen sizes.  More products to carry, each with relatively lower production runs for each size, so less ability to get high volume discounts.
5.  In order to carry the TV at the Apple store, Apple would probably have to increase back of the store warehouse space in many, if not all, locations.  Problem magnifies with each size of screen Apple produces.
6.  The screens would be bulky.  Not easy to walk out of the store with and Apple would have plans to add carts, or perhaps provide a way of providing home delivery.

These are some of the reasons why I think Apple will stick with providing a separate box that hooks up to any t.v.

Now what they do with that box is what intrigues me. 

Will they make an attempt to push aside the cable boxes?  There are FCC regulations that mandate television provider companies to allow consumers to use a CableCARD device to slide into the set top box of their choice. 

By consolidating with the set top box, Apple can do what they do best and improve the UI.

Will they finally have a AppleTV app store?  And what about games?

I think that Apple’s long term goal is to become the hub of the living room.  Microsoft tried and as usual failed because they don’t understand the customer.

Of course, I could be completely wrong. smile

Chris Baker

I agree that I don’t see the need for Apple to make an actual TV. The AppleTV is the device that could interact with ANY TV. (What size would it be? 32—maybe too small for some people. 46? Maybe too big for some people? etc.) I have a TiVo and basically my TiVo is my gateway to most of my TV viewing. I also have an old AppleTV (160GB) that I use to watch TV shows/movies I have ripped from DVDs. I really think TiVo is almost on par with Apple as far as human interface. If TiVo could (easily) stream movies from iTunes and/or a network drive, I probably wouldn’t need my AppleTV. I don’t mind shelling out $100 every few years for a new AppleTV, but if I spend $1300 on a TV, I am going to be keeping that sucker for a decade or so.

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