Mac Musings

How iTV Will Become Apple's 'Next Big Thing'

Daniel Knight - 2006.09.20

Innovation is in Apple's DNA, and the company isn't afraid to take chances, try new things, sometimes make mistakes, and learn from them. The question is, will iTV be a hot new thing or a mistake?

The iPod

I couldn't understand what Apple was thinking when they introduced the iPod five years ago. Apple has always been a computer company. What's this with an expensive MP3 player? (At $399 for 5 GB and 1,000 tunes, it was more expensive than today's 80 GB video iPod.)

Over time the iPod gained Windows support, iTunes, the iTunes Store, USB 2.0, and more. It grew from a single Mac-only product into a line of hardware that dominates the industry.

Mac TV

I thought Macintosh TV was a brilliant idea. Take the moderately popular LC 550 and modify it a bit with a television tuner and remote control. You've got a Mac and a TV in one box - perfect for the dorm room or den.

Two problems: Apple only produced 10,000 of them, and they crippled the Mac side by limiting RAM to a maximum of 8 MB. And then they priced it at nearly US$2,100 vs. $1,200 for the 550.

Newton

Everyone was impressed with the promise of the Newton, although we all recognized it had some teething pains. A lot of us are still Newton fans.

But Apple gave up on the Newton within five years of its introduction. The smaller Palm Pilot was trouncing it in the market, and the Newton's cumbersome size was probably a factor in its demise. To this day Apple is resistant to producing a handheld or tablet Mac.

Mac Clones

Bill Gates had proposed that Apple license the Mac OS back when the Mac was new. Apple didn't do it until 1995, at a point when Windows had become a very viable option and Apple's market share was slipping.

We loved the clones from Radius, Power Computing, Umax, and others, as they tended to be innovative, powerful, and competitively priced. In the end, the clones did nothing to slow decline of the Mac OS market, and the program was killed off after 2-3 years.

To this point, Apple is hesitant to offer Mac OS X for non-Apple hardware. With the transition to Intel CPUs and the impending release of Microsoft Vista, the time could be right to go head-to-head with Microsoft on the OS front.

iTV

I like the idea behind iTV, which essentially expands the idea behind AirPort Express to video. The set top box will interact with your Mac or Windows PC with iTunes, which can stream video to it.

iTV has USB 2.0, ethernet, 802.11 wireless, a remote control, and digital and analog sound and video output. The latest rumor is that it includes a hard drive.

The smart thing about iTV is Apple's realization that we'd generally prefer to watch our video on our TV sets, not on our iPods or computer screens. And rather than have you run a long cable from your Mac to your TV, iTV can connect via ethernet or WiFi.

The biggest drawback I can see is the lack of composite video output, which would make it compatible with a lot of legacy TV sets. But the only video options are HDMI and component video.

That could really minimize iTV's potential initial market, just as the use of FireWire and Mac-only support minimized the iPod's market in 2001.

That may not be a bad thing. iTV is a set top box without a tuner and without the ability to "do a TiVo", so a lot of people are going to question spending US$299.

Those with expensive component TVs are going to be a lot more willing to spend that kind of money for iTV than people with a $199 TV. Over time, costs will come down, component TV will become more affordable, and the market for iTV will grow.

Will It Fly?

I was skeptical that Apple would have much luck selling "DVD quality" videos through the iTunes Store, but they've already sold 125,000 at US$9.99 to $14.99. (I'm a bargain hunter. I love buying previously viewed DVDs from my local video store, digging through the 2/$11 bargain bin at Walmart, and using Froogle to dig up the best deal when I want a newly released or obscure DVD.)

I'm hearing rumblings that the quality of iTunes video isn't as good as from a DVD. For my money, I'd rather have the disc with its extras, that I can take to a friend's house, that I can trade or sell if I don't want to keep. But a lot of people seem willing to pay for just the movie itself in electronic format.

Apple made a conscious decision to price the original Macintosh high, and it was widely perceived as overpriced. A lot of us thought the same of the iPod, but Apple believed there was a market for a better MP3 player. They took a chance, and they succeeded - to say the least.

Apple is putting the emphasis on quality with iTV, and you can be sure that people with high-end TVs are going to be scrutinizing the video output from iTV. If those 640 x 480 resolution Disney videos don't look great, we're going to hear it big time when iTV ships.

I'm confident Apple has taken that into account. We don't know a lot about the inner workings of iTV, but I'm guessing there's a CPU or GPU in there that will scale the 640 x 480 H.264 video to the screen's native resolution. And the hard drive, if present, will probably let you pause and rewind without taxing your computer.

Steve Jobs hasn't made many mistakes since taking over at Apple. Yes, there was the Cube, which still has a cult following but never made it as a mainstream product. But the iMacs, the iBooks (clamshell and white designs), the G5 Power Macs, the G4 PowerBooks, the Mac mini, the iPod, AirPort, iSight, Mighty Mouse, and all of the Intel Macs have been big hits. That's quite a track record.

I could be wrong, but I think iTV is going to be Apple's next iPod, since it works with both Macs and Windows running iTunes and embraces that standards we'll soon be seeing on all TVs. It may be a slow start, but I think it's going to fly.