The battle for the living room has been heating up for a while; now that Apple has reloaded its weapons, the fight just got more interesting.
In the past, Apple co-founder and chief exec Steve Jobs has been a little dismissive of Apple TV, referring to it as a “hobby”. He made light of that at Apple’s autumn event in San Francisco, then moved to elevate the product and stuck a hard-to-beat $99 (£64) price tag on it.
Apple TV will also stream shows for 99 cents (64p), as well as a collection of HD movies for $4.99 (£3.24).
“Apple wants the living room and they are not ceding this market to anyone,” says Michael Gartenberg, partner with research firm Altimeter Group:
“They need to change that consumer behaviour for TV watching, which is a 50-year-old activity that hasn’t really changed. With Apple TV, they are looking to change it, evolve it and get the price point so it becomes more of an impulse purchase. And with their marketing and retail muscle, they have a good shot at driving this forward.”
Mr Jobs also acknowledged that to date Apple TV has been a bit of a flop. OK, he didn’t quite say that: but he did say that it had “never been a huge hit”.
He added that the company had learned many lessons including the fact that people want Hollywood movies and TV shows and professional content. What they don’t want, he said, is “Amateur Hour” – which is clearly a swipe at Google and YouTube.
Google laid bare its plans for the so-called third screen back in May by announcing an internet-focused TV in partnership with Sony, Intel, Dish Network and Logitech. The Sony-made sets are due to go on sale in the autumn.
In July, YouTube unveiled a product called Leanback which is in beta. It is aimed at creating a single channel that puts the user front and centre by streaming videos constantly while trying to learn what he or she likes so that it can customise the offering.
On the day that Apple held its launch, Amazon threw its hat into the ring with the news in the Wall Street Journal that it is working on a new subscription service that would deliver TV shows and movies over the internet.
And Sony did likewise at the IFA technology fair in Berlin with an offering that is set to challenge iTunes.
Content is always king in this kind of conflict; while Apple has only signed up ABC and Fox in terms of studios, Mr Jobs said he is confident others will soon follow.
“We think the rest of the studios will see the light and get on board pretty fast with us,” he told attendees.
Analyst Mike McGuire of research firm Gartner says that, based on Apple’s past performances, such an assertion is hard to disagree with:
“What I have been telling people is go back to the very first press release for the iTunes store in April of 2003. It is kind of quaint because they started with 500,000 tracks which wasn’t representative of the entire catalogue of all the major labels.
“It won’t happen with Apple TV overnight, but it will shift and I really think the studios won’t have a choice but to start playing with this.”
His colleague Van Baker isn’t so sure Apple TV will be victorious, but he grants that, for consumers, the price is compelling.
“I think it stays a hobby for a while but it is going to be a much bigger hobby because, let’s face it, $99 beats $299 hands-down – and if the other networks come around, I absolutely agree it moves beyond being a hobby.”
So as web companies elbow their way in to control entertainment in the living room, what does this mean for the traditional players?
BK Yoon, Samsung’s president of visual display business unit, didn’t seem too disconcerted by the increased competition when I spoke to him earlier in the week:
“We are in the transitional period where we are witnessing a shift in the TV paradigm and I do believe we are at a starting point of seeing companies try to control the living room.”
While Samsung may be the leader in TV sales, it is betting that smart connected TVs and 3DTV will be the next big thing: a two-pronged attack. But this week at its first-ever TV developers’ conference in the US, Mr Yoon put the emphasis on persuading developers to develop apps for this nascent marketplace.
“When we talk about TV, it is something that the consumer perceives they just watch – but when we look at the smartphone, it is a much more personalised experience.
“The TV usually sits in the living room and it is for the whole family. So it is a very different environment, but when it is about 2012, I think we will see a much bigger change in attitude towards smart TVs.”
Mr Yoon said he recognises that apps have been crucial to the growth of the smartphone market and he believes the same will be true for his company’s smart-TV proposition.
Samsung is currently offering 87 apps in the US from the likes of Blockbuster, Hulu, Cinema Now and Amazon. The company has also developed a TV app with ESPN to give richer content like player statistics during a sports game. It is also working with Dreamworks on an app that will debut next month to show 3D movie trailers and full-length features.
Samsung’s aim is to have a stock of around 200 apps by the end of the year: a long way from Apple’s App Store of 250,000. Co-founder Steve Wozniak said he likes both approaches:
“I was at Samsung’s event and I am close to them for different reasons. They build it right into the TV, so there is the convenience factor – one less step. So I wouldn’t rule out smart TVs.
“But remember stereos, where you could by all-in-one or different components. As far as the component device, Apple TV – you can use it on any display. Will it dominate? I don’t know. But the formula for how the world is going to move to digital TV, I think it is finally here.”
The stakes are high and Apple’s reinvigorated entry has upped the ante a little.
Andrew Eisner, director of community and content at consumer electronics recommendation site Retrevo said that from a Silicon Valley perspective, there are two clear contenders set to duke it out:
“Again this is all about the apps. Apps make the world go round and everybody is interested in apps. Google is also interested in apps and this is another part of the war with Google for the living room.
“Personally I think as people migrate to getting their information from apps rather than going through a search engine, it is an area of concern for Google. People will get their stock prices and weather reports from an app rather than a search engine. Of course Google could address that too with their TV efforts.”
