Tim Cook: ‘Think of Apple TV as a Foundation for Broader Business’

Apple TV (4G)

It might be tempting to think about the Apple TV as a hardware device, and its associated revenue combined with apps that deliver content and the associated revenue collected by Apple. But, during Apple’s 2016 Q3 earnings report, CEO Tim Cook said that we should think about the Apple TV in a different way.

4G Apple TV
4G Apple TV. Image credit: Apple

The magic question came at the very end of the call when Kulbinder Garcha from Credit Suisse asked:

Garcha: On the services side, as Apple has spoken more and more loudly [enthusiastically] in the last three or four quarters, I think about some of the comments you’ve made about the Apple TV. About how the TV experience hasn’t changed since the 1960s or 70s… In terms of driving actual video on demand services.. Is that something Apple’s wants todo themselves? Do you want to partner? Could you even build content? How do you think about that as an actual business opportunity?

Cook: The introduction of the Apple TV and tvOS last October and the subsequent OS releases, what’s coming out this fall… think of that as sort of building the foundation for what we believe can be a broader business over time. I don’t want to be more precise than that, but you shouldn’t look at what’s there today and think: “we’ve done what we want to do.” We’ve built a foundation that we can do something bigger off of.

Apple TV Facts. Now Speculation

Just what that “broader business” might be is open to speculation. We know that Apple previously wanted to offer a TV subscription package, but that didn’t work out. See: “3 Reasons Apple’s TV Subscription Service Failed.” But that doesn’t exhaust Apple’s options with the current and future generations of Apple TV and tvOS.

Other realistic options have been suggested, such as a comprehensive home automation hub, which could include a central display of various video and technical security services. Perhaps as an AR hub for information services.

My own tendency is to think about other TV related services that go beyond simply taking X percent of the billings related to tvOS apps that deliver content. Basically, when the customer has large display connected to the internet, there’s no limit to what services might be offered.

Tim Cook has just suggested that we think about the Apple TV in a new way. Let the fantasies begin.

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