Apple's iTV: Bridging the Big Divide

Apple Computer (AAPL) often proves itself to be the best at building smartly designed consumer products. But it's not always the first.

That was my first response to the surprise announcement by Steve Jobs on Sept. 12 concerning a new product, the iTV, designed to wirelessly convey digital content from a computer to a television. The headliner of the San Francisco event was supposed to be the addition of a movie download service to Apple's iTunes. But iTV, which won't even hit the market until early 2007, stole the show.

Apple is certainly not the first to try to build a product that crosses the great consumer electronics divide between the TV and all that digital video and audio content taking up ever-larger sections of PC hard drives. Others have sought to cross it, most have failed. I don't expect the same from Apple.

EASE OF USE CRUCIAL. Think about all that marvelous content that you've digitized, from your MP3 collection, that cache of Firefly episodes you grabbed from BitTorrent, all the songs and music videos and TV shows you've downloaded from iTunes, and all the home movies you've converted from old formats to new digital formats over the years. Sure, you can enjoy it on the PC, but let's face it: It looks and sounds better in the living room, where you've got your plasma TV screen, your stereo system, and so on.

But getting that digital media into the living room has never been slick or simple. Microsoft (MSFT) tried, first with the Media Center PC, a standard consumer PC outfitted with a bunch of external connections suitable for linking to a home entertainment system. Later, it added the Media Extender, which was intended to use the home computer network to push that PC-stored content to the TV and stereo. Do you know anyone outside Redmond, Wash., who finds it user-friendly?

Other innovations have come from upstarts like Akimbo, which offers a set-top box that pipes video from the Internet directly to your TV. Some of the programming it carries is aimed at niches that aren't big enough to warrant programming, even on niche-driven cable networks—there's an entire block of programming devoted to yachting and boating, for instance. Other programming comes from big names on cable TV: History Channel, Discovery Channel, BBC, etc. Akimbo's approach has been not to bother with the PC at all; just connect the box directly to the Internet and the TV, and off you go. But it's also now a software-only service included in the myriad offered on the Microsoft Media Center PC.

CORE ATTRIBUTES. Another notable startup is Sling Media, which has that interesting little box that lets you watch the shows you've recorded at home from your PC when you're away from home. Meanwhile, DVD rental concern Netflix (NFLX) has a download-friendly set-top box of its own in the works (see, 9/12/06, "Don't Nix Netflix Just Yet").

Obviously, Apple thinks it can do better than its predecessors. It has reason for confidence, judging from the company's track record. Remember the MP3 players—say, the Rio—before the iPod? So do I, but just barely. The mechanics and the usage model were already established. What made the iPod a success was a heavy dose of what Apple does best: a little technical improvement, ease of use, and style.

Apple saw that high-capacity MP3 players were slow to load large libraries of music, and so used a Firewire connection on the first iPod, which was much faster than the USB connections used at the time. It has since opted to support the faster USB 2.0 interface, but picking Firewire early on was a crucial technical improvement. Or what about legal downloading before iTunes?

QUESTION OF CONTENT. To be sure, when it comes to iTV, Apple has a lot of proving to do. It's not entirely clear what technical improvements Apple has in store. The connection to the computer will apparently be wireless, but Apple hasn't said what variant of Wi-Fi wireless networking technology it will use.

My guess is that Apple will throw its lot in with one of the parties in the battle over the evolving standard known as 802.11n, the next version of Wi-Fi, which should be a lot faster than the current standard, 802.11g. Apple will have to do something new on the wireless front, because 802.11g, which is what its Airport Extreme line of wireless networking products supports, just isn't fast enough to handle video, at least not at the quality needed for a high-end TV set.

Then there's the question of content. Some are concerned that Disney (DIS) is the only major studio already publicly signed on to the new movie download service that so far offers only 75 movies for download. But Apple is used to starting small with new media efforts. When it first debuted TV shows last year, it carried only five, and it offers more than 200 now. And the iTunes Music Store was born with a music library of some 200,000 songs, which seems awfully small considering it boasts 3.5 million songs now.

Apple's history has shown us that it can make seemingly complicated technical products easy to use and popular among consumers. If anyone can make bridge this great divide, Apple can.

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