The Operational Details of the Apple HDTV

AppleHDTVA lot has been written about the viability of an Apple branded HDTV and how it must fail in the market. But most of that analysis is based on the idea that Apple’s offerings would be no better than any off the shelf equivalents from the current manufacturers. What if Apple’s HDTV worked differently?

I’ve been thinking about some of the things that Apple might do with its own branded HDTV, assuming it decides to proceed. How might it be different than current offerings? I surmise that before we can make any declarations about why or how such a venture would fail, it might be helpful to think about what Apple could offer that its competitors currently do not.

This is just speculation, but I hope it leads to a more vigorous discussion about what Apple might do. After that, it’s more reasonable to think about whether not not Apple would fail or succeed.

21st Century Television

1. Display Resolution: Currently, makers of HDTVs try to minimize cost by making the resolution exactly the same as the HDTV standard: 1920h x 1080v. There’s a vast industry that cranks out panels of exactly that size. What if Apple were to go to, say, Sharp, and ask for special panels, say, 2200 x 1200? Because Apple would expect sales to be modest for starters, such an offbeat display would be expensive to make and pricey, but Apple customers are accustomed to that. Moreover, Sharp wouldn’t mind because the low volume, high profit display wouldn’t compete with their own offerings — at the start.

What would this achieve? The high definition video section would then be in a window of the larger display. Now we’re beginning to think like a Mac user. What doors would open?

Additional information could be displayed around the outside. Alerts, weather information, or even the corresponding data drawn from the IMDB. After all, from my reading, I’m not the only person who watches TV and movies with the IMDB page open on the iPad in my lap.

In a multi-tasking, social world, that extra space outside the high definition TV window is golden.

couple & TV

2. SmartTV. Just as we moved from feature phones to smartphones, now we could be moving from feature TVs to smartTVs. For a long time, HDTVs without Ethernet have been dependent on the smarts of the DVR to drive them. Makers of HDTVs have had precious little vision when it comes down to what to do with an Ethernet connection — except maybe to offer a VOD movie service.

However, an Apple HDTV, a SmartTV, with an A6 CPU and a ton of Flash memory could do some nice things.

  • Provide a buffer for fast instant replay.
  • Take a screen shot and with a button press upload it to your Twitter account. “Hey guys! Look what I just saw!”
  • Freeze frame, then pick out a face for facial recognition. (Apple knows something about facial recognition.) This could come in handy when IMDB doesn’t have complete data.
  • Reverse AirPlay. Send the video stream to an iPad somewhere else in the house.

HDMI sends an encrypted steam from, say, the DVR to the TV. As a result, TV makers don’t think much about post processing of the data onboard the TV with a powerful processor and flash storage. That would drive the price up in a very cut-throat market. This is Apple’s value-added opportunity.

3. Gradual Replacement. Apple knows that people aren’t going to bring an Apple HDTV home and then instantly cut the cord. It’s much more likely that customers will just do an in-line replacement: unplug the power and HDMI of the old HDTV and insert the Apple HDTV in its place.

There’s a good reason for that. Let’s do the math. The average household in the U.S. has the TV on 8 hours per day. (The average viewing per person is just short of five hours.) That means the average TV is on 243 hours per month. Neglecting those who use an Over the Air (OTA) antenna for their HDTV, if the average cable or satellite bill is $80, that means we’re paying 33 cents an hour.

Apple HDTV

On the other hand, Apple is charging $3 for an “hour” for a TV show in HD. (Actually, 42 minutes without commercials.) So clearly, if the Apple HDTV customers cut the cord and paid for everything they watch, they’d be spending over $1,000 per month. That’s not going to work. So Apple will have to 1) figure out how to provide a lot of free TV, or rather, steer the customer towards it, and/or 2) integrate with current customer systems. After all, it’s unlikely that these Apple customers are suddenly going to throw their ROKU, DVR and Blu-ray player in the trash can.

As a result there’s some work to do in terms of a User Interface that allows the average household to leave that TV on, chewing up 32 cents per hour and/or integrating an OTA antenna and then nudge them over to Apple’s offerings at $3 per hour when the spirit moves them. That’s probably the biggest challenge of all. If there’s a code to crack, that’s it.

I’m guessing that, over time, once the Apple TV is in the household, the TV viewing experience that I’ve guessed at above will become so compelling that customers will gradually cut the cord to their traditional providers and adjust their habits. Some may never do that, depending on how successful Apple is in working deals for local news and sports. I note here that Disney owns ABC and ESPN, and that Robert A. Iger, President and CEO of The Walt Disney Company is now sitting on the Apple board of directors. Just a thought.


A View to a Kill

Very briefly, I’ve described some of the things that Apple could do with a really intelligent TV. Put the guts of an A6, flash memory and iOS inside a TV, and Apple could make current TVs look like something from the days of I Love Lucy.

However, in addition to the advanced technologies, Apple will also have to be very smart about how customers want to and need to integrate with their own current systems. For example, some families run all their HDMI devices into an AV Receiver and send just one HDMI line into the HDTV. (Me included.) The receiver drives the speakers, and there could be many in a 5.1 or 7.1 system.

If Apple puts a big Wi-Fi antenna in the Apple HDTV and pulls content in from the wireless router, how will customers enjoy the use of those external speakers? These kinds of advanced customers, without doubt, are those that might actually spend the extra money for an Apple TV. Extra hardware to deal with this issue defeats the simplicity Apple is known for. The current Apple TV black box solves this problem nicely because it can plug into an AV receiver. Perhaps Apple will settle, in the meantime, for an optical audio cable out from the Apple HDTV into the AV receiver.

What I’ve discussed here is that Apple has an enormous opportunity to uplift the TV viewing experience, but some near-term technical issues may mean that Apple isn’t going to alter the landscape of our living room hardware overnight. The key may be to first introduce us to a breathtaking, modern way of watching TV, but it’ll be nicely integrated into what we already have. Over time, college students, young families and people who haven’t invested in a lot of gear will find that the Apple TV is all they need. By doing that, Apple gets the product out there, but doesn’t risk abject failure out of the gate. In other words, will it blend?

These are the opportunities and problems Apple faces, and understanding them is critical to deciding if this venture would succeed or fail.