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Munster: AppleTV Ready For Its Close-Up

Posted by: Arik Hesseldahl on August 20, 2009

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PiperJaffray analyst Gene Munster is out with an interesting research note today concerning his take on the future of AppleTV and Apple’s plans for the living room. He says he expects Apple to continue to offer updates to the product, and to add DVR functionality, a feature that many have suggested, and which would put Apple in competition with Tivo.

Munster says he’s modeling for Apple to sell 6.6 million AppleTV units during the 2009 calendar year, but he says that estimate could be conservative if there is new hardware during the year, which there very well could be. Remember that AppleTV is accounted for as a subscription, in a manner similar to that of the iPhone. Buy one and Apple recognizes the revenue from the sale over eight quarters in order to subsidize the development of new features in software during that period. However the economic lifetime of the first AppleTV devices — the product started shipping in March of 2007 — is over, meaning it’s reasonable to expect an update soon.

As I argued in February, the most important change that should come to AppleTV is a development environment for applications, similar to the iPhone. Not only should the device be opened up to developers, but to the many streams of video content that populate the Web. If it’s on the Web, it should be available on your TV set, via AppleTV, pure and simple. And the people who will bring those services to your TV? Third party software developers.

Rather than do that, Munster says he thinks Apple is exploring a subscription service that would effectively replace a cable or satellite bill, and offer access to current and older TV shows, though he concedes launching such a service would take some time, and perhaps might not happen before next year.

Over the longer-term, Munster says that by 2011, Apple might graduate to building a connected television set, with built-in DVR and media functionality. It would talk to your Mac (or PC) and your iPod or iPhone. The iPod or iPhone might also be a great game controller.

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Reader Comments

Bill

August 20, 2009 05:24 PM

If Apple conditions access to the internet through a closed subscription service, it will be damaging itself. Already you can access the internet through Playstation using your existing cable provider; you can play HULU and other video sites. I don't see how Apple would be competitive by limiting options that are offered on other platforms which reach the internet. Its too late to have a closed system model.

Beltway Greg

August 20, 2009 06:48 PM

I can tell you that the war that seems to have been lost for web content has yet to be fought. Rupert Murdoch and just about anyone with a stake in the distribution of information is trying to figure out how to make a buck and limit access. We'll see.

Gil

August 21, 2009 12:04 AM

I wonder if Apple has an act three in them? After what they did with music, then what they've done with smartphones.. could they do it with television? They say that the AppleTV is a hobby, but what if they get serious?

If they were to offer a simple solution to easily watch whatever whenever anyone wanted, with access to games, entertainment and various third party apps, web browsing and email, plus say, video chat with friends and family directly from your sofa? All controlled with an iPod touch, iPhone or a dedicated touch device? That would be worth the price of admission.

JT

August 21, 2009 09:31 AM

Exactly how does opening up the ATV to 3rd party developers help the platform? Do you really think it's an app platform? It's a CONTENT platform. Making more content available (via DVR‚ web and expanded media content) will spur adoption. "Opening up the platform"‚ as uninformed pundits are so fond of advising Apple to do‚ will only create another ecosystem for them to manage. There's major upside for an app platform‚ not for the Apple TV.

E. David Zotter

August 21, 2009 12:31 PM

Here's my take.

Everyone hates their cable provider - Cablevision is the worst, in my opinion.


I'd would love to cancel my bloated and expensive cable TV plan....and just keep the broadband connection. 90% of the stations I never use.


For the past few years, I've been using the AppleTV and purchased several for close friends. All of them love it, but have never heard of the product beforehand.

I'd love to see Apple with a cable lineup, where I can subscribe by station or show.

My TIVO 3 is getting dated. The GUI is now not suitable for all the branches in the menu. Most cable DVR's are junk.
The cable industry offering is ripe for change, much like mobile phones a few years back....

Ed

August 21, 2009 01:39 PM

If the next generation offers DVR and apps, I'll be there.

Peter Contardo

August 21, 2009 01:41 PM

From a device standpoint, Apple products certainly will benefit as the three-screens converge, but I agree, in order to really take advantage of their inherent design advantages they will have to find a way to pump more content through their system.

siphandone

August 21, 2009 06:12 PM

AppleTV is dead!!!!!!!!!!!!!

Roy G. Biv

August 23, 2009 12:24 PM

Apple has revolutionized the music industry and now the phone industry. TV content and distribution is more difficult as there is an entrenched system, whereas the other two were more fluid and rapidly changing. While it is true that TV is also changing , on demand, Internet access, etc. , there are many technological and social hurdles. Apple can chip away, even as it takes bold steps. Others like Microsoft via Windows will do the same. Open Internet standards folk will push from that side. Also there are the cable and satellite operators. It will take a while to sort itself out. But over time it means ever more choices and content for all us, and we should be grateful for that.

darragh

August 26, 2009 07:15 PM

Mac Mini + Plex =

a development environment for applications, similar to the iPhone. Not only should the device be opened up to developers, but to the many streams of video content that populate the Web. If it’s on the Web, it should be available on your TV set, via AppleTV, pure and simple. And the people who will bring those services to your TV? Third party software developers.

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A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.

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