Apple Computer Chief Executive Steve Jobs made a few out-of-character moves as he unveiled a slate of new products on Sept. 12. For starters, he left the trademark black mock turtleneck at home, instead donning a black button-down. The real shocker, though, was Apple's decision to tout a product months before it's due to hit the market.
Of course, there were the unsurprising announcements, starting with an overhaul of the iPod family of digital music players. Then there was the long-rumored movie download service—essentially an enhancement to Apple's iTunes store.
A NEW TRICK. But then Apple (AAPL) made what can only be called a highly unusual move for a company that forbids employees from even speculating publicly about forthcoming products. Jobs unveiled the iTV, a product he's hoping will bridge the chasm between those movie downloads and the TV set in the living room. Thing is, it won't be available until early 2007. When released, it will sell for $299.
"Apple is in your den, Apple is in your living room, Apple is in your car and, of course, Apple is in your pocket with iPods," Jobs told the audience at the San Francisco event. "I hope this gives you a little bit of an idea where we're going."
Where Apple is going—or hopes to go—is territory that rivals have so far failed to conquer. Apple says iTV is capable of moving music, movies, and other content from a computer to a television, or another entertainment device. This would be done using wireless technology—probably some variant of wireless fidelity, although Apple didn't explain further.
THE "MAGIC COMBINATION." Microsoft (MSFT) has made attempts with its Media Center PCs in conjunction with Hewlett-Packard (HPQ) although the combination hasn't truly succeeded in getting entertainment off the PC. Intel (INTC) has also made noise about its own entertainment PC concept called VIIV (rhymes with "five") but little has been heard about the initiative in recent months.
Other companies in the networking space, such as Netgear (NTGR) and Cisco Systems' (CSCO) Linksys, have developed products aimed at pushing content stored on a PC to the home entertainment system, but none have hit upon the magic combination of ease-of-use and a simple content delivery scheme.
Apple seems to be betting that it can teach the motion picture studios the same lesson it taught the movie industry: Marry the device and the content in a harmonious ecosystem with a simple price structure, and consumers will flock.
SPEEDY DEVICES. One important question left lingering about iTV was exactly how the device will work. Jobs said it will use some variant of wireless networking known as IEEE 802.11, and Apple already has some history with this technology. It was early to deliver Wi-Fi networking products under its Airport brand. But Jobs also said that the iTV will support HDTV video content. That implies the device will use a version of Wi-Fi that is faster and more advanced than the prevailing standard (802.11g), which tops out at data transmission speeds of 54 megabits per second (Mbps).
The next iteration of that technology, 802.11n, will boost the data speed to above 200 Mbps, and perhaps as high as 540 Mbps. That would be fast enough to support a high-definition stream, but it isn't expected to be approved until 2008.
Meanwhile, companies such as Netgear, Linksys, and D-Link have been pressing ahead selling gear that is based on competing iterations of early versions of the standard. For Apple, pressing ahead with Wi-Fi technology before it becomes a ratified standard is nothing new—the Airport Extreme line of products used 802.11g before that standard was ratified.
STICKING TO BASICS. The iTV device almost overshadowed Apple's other major news of the day, which was the announcement of its long-expected movie download service. The Walt Disney Company (DIS), of which Jobs is a director and the largest shareholder, was the only major studio to offer films available for download.
But if history is any judge, Apple will follow its tried-and-true methods that drove success first in selling music and then TV video downloads. When it first launched in 2003 for commercial music downloads, Apple started with a library of only 200,000 songs. Today it pegged that number at 3.5 million songs.
TV and music video downloads started small as well, with only five TV shows available to start. That number has grown to 220. Jobs said 75 movies would initially be available. And deals with more studios, including Lions Gate Films, are expected to be announced before long.
IPOD ADVANTAGE. Apple's movie download service followed close on the heels of an announcement by Amazon (AMZN), which debuted its own video download service called Unbox. That is focused primarily on TV content, but includes some major motion pictures. Amazon also has several partners including CBS (CBS), Fox Entertainment (NWS), and Sony Pictures Home Entertainment (SNE).
But Apple has something that Amazon doesn't have: the iPod. And Apple gave that family of products a substantial revamp today. The flagship video-capable iPod has a brighter, improved screen and now sports hard drive capacities as high as 80 GB in prices ranging from $249 to $349. The smaller and hugely popular iPod nano grew thinner, and at its high end doubled its capacity from 4 GB to 8 GB. The nano now sells for $149, $199, or $249 depending on capacity. Apple also revived its old design trick of selling iPods in several colors.
Finally, the iPod shuffle shrunk from the size of a somewhat large USB keychain drive to about the size of a money clip. Storing a gigabyte worth of songs, it will sell for $79. And in upgrading that tried-and-true product, Jobs made clear that he's not straying too far out of character—button-down collar or no.
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