Steve Jobs' presentation on September 1st didn't offer much that hadn't already been anticipated by others in the industry and Apple fans. While there was the obligatory new line of iPods, the presentation dealt more with entertainment services than it did new products. The biggest news out of this was a much cheaper Apple TV, which got a $200 dollar price cut, from $299 to $99.
Apple TV's Less Than Stellar Performance
Apple TV was released March of 2006. A digital media receiver, it allowed content from online programs like iTunes, Netflix, and Youtube to be streamed onto HDTVs. The device can also connect with local networks and use the networks library of ripped music or video.
However, it also has a number of limitations. Apple TV is incompatible with a number of popular web services, like Amazon and Hulu, and media services (such as MTV, Comedy Central, and CBS to name a few). Apple TV also has no digital recording function, which means you cannot record and store media broadcast over network or cable television, and many viewers do with TiVo and other DVR devices.
While it was initially the top selling Apple product upon it's release, sales quickly slowed. It seemed consumers were not ready to shill out $299 for a product that had so many limitations and failed to greatly improve on the advertisement-supported content being offered by other services. Apple fans may have wanted to love the device, but ended up being unimpressed with Apple TV. Cable had beaten iTunes, at least for the time being.
Apple Slashes Prices
With hopes of grabbing a larger share of the market, Apple recently announced the above mention price cut, which greatly reduces the cost of a unit. In addition, Jobs told those attending the presentation that they had signed a deal with ABC and Fox to rent episodes on television shows for 99 cents, as opposed to the normal $2.99 price tag. Unfortunately, any episode from a show not on either of those networks will remain at the higher price (for now, anyway).
So why push a product that hasn't yielded much return? A likely reason is to get a jump on rival Google, who is set to release Google TV later this fall. The more units Apple is able to sell before Google releases their device, the less available market Google has to work with. And there is still a lot of market left, as neither Apple TV nor it's competitors, devices like Roku and TiVo Premiere, have become huge hits with consumers.
Worth The Hooplah?
So Apple clearly hopes more people will buy the more affordable product, but will consumers bite? Part of the reason devices such as Apple TV haven't caught on is that there are plenty of much cheaper alternatives.
Hulu streams recent episodes of television shows for free (with a few commercials), and offers a much more extensive offering (with no commercials) for $9.99 a month. Netflix also offers a selection of TV shows to stream with their Watch Instantly feature, and is working on continuing to expand its instant selection. And of course, they offer the DVDs through the mail. Even at a reduced cost of 99 cents per episode, renting shows through Apple TV will likely end up being more expensive for avid watchers.
Apple may also run into problems with its own products. iPads and iPhones have apps that allow users to stream video and music, and already integrate with services like Netflix. So while the price cut for Apple TV may make it a better deal than similar devices from rival companies, there is no guarantee that consumers will suddenly flock to the product.
The bottom line is that Apple should get its hopes too high when it comes to Apple TV sales. The price cut will surely help, but that is only half of the picture. Apple still needs to work on convincing consumers that their device offers a service they can't get elsewhere, and that will be quite a task.
Timothy Gaydos - I attended Ohio University for four years, studying Video Production and Film, earning a BA in Science and Communications from the Scripps ...
