TV companies may well be led by Apple into a completely different world of TV entirely
IT’S NOT OFTEN you hear an executive saying words so laden with hubris you can practically hear the bell tolling for them in the background.
Chris Moseley, Samsung’s UK marketing manager for its audio-visual products, told Gadget site Pocket Lint last week “TVs are ultimately about picture quality. How smart they are a secondary consideration.”
He was responding to the persistent rumours that Apple is readying a new television product, aimed at the giants of television like Samsung. This would mean taking the current Apple TV product from a $99 device that Steve Jobs described as a “hobby” to a more serious line of devices, potentially with content deals like iTunes, and an integrated display.
The rumours are strong and growing. In December, the Wall Street Journalpublished reports that the company was in negotiations with TV media companies, and had mentioned in vague terms a new TV product. Analysts Piper Jaffray claim that Apple has spoken to at least one "major TV component supplier" about a potential display for the device.
The television market has been stable for some time, with little interest in anything beyond displaying what TVs are sent by satellite, cable and terrestrial broadcasters. The top-end hardware fight, as Moseley says, is mostly about picture resolution and quality.
But if that’s what manufacturers are concentrating on, then that’s exactly the moment for Apple to step into the market.
Screen quality, as an attractor for the majority of customers, is bottoming out, just as processor speed became less and less important for computer purchasers. What annoys you more – that your television picture isn’t high resolution enough, or that your digital TV box takes five seconds to change channel? That your colours aren’t beautiful enough, or that you can’t find what you want to watch now on your intensely confusing digital program guide?
Television is, already, all about the software. And the software, for now, sucks. Some is better than others, but Moseley’s point indicates why none of it is good enough. The programming part of your TV is thrown together, and stuck into state-of-the-art hardware.
Or worse, it’s not in the television at all, but in a medley of set-top boxes, digital video recorders, mysterious audio and video connections, and endless incomprehensible remote controls.
Could Apple step into this, given their lack of experience building a high-grade television? Of course they could. Indeed, this is pretty much exactly the market they faced when they entered the mobile telephone market.
There were plenty of smartphones before the iPhone, but they were all a little clunky, a little slow, a little frustrating to use.
Apple brought their marketing, their user interface skills, and their devotion to a single, highly refined product. They not only established a beachhead for their product, but they also created a secondary market around it. The iPhone was not just an accessory, but an accessory with its own accessories – be they software apps, or complementary hardware.
The comparison runs even deeper. Before the iPhone launched, Apple experimented with a “hobby” iPhone – the Rockr, a Motorola phone with iTunes software.
The product quietly failed, but it gave the Apple engineers an insight into how the mobile phone market operated.
The current €121 Apple TV is Apple’s similar, early, foray. And Samsung cannot seriously believe that Apple can’t apply the expertise it has gained from its monitor and retina-display LCD development (and ability to massively invest and dominate supply channels).
Jobs himself, the same WSJ article reported, was dismissive about entering the TV market – the margins are low, he told Apple employees, and consumers don’t buy televisions very often. But Jobs frequently dismissed a market just before entering it. And we know that before his death, Jobs mentioned to his biographer Walter Isaacson that he had “cracked” the best interface for operating a TV.
In truth, it might not be Samsung, or its product managers, who really need to worry if Apple turn their gaze toward the television market. The iPod, iPhone, and iPad stories show that the group who has to gamble most on Apple’s new markets are the content providers. If they choose not to go with Apple, they risk missing the initial gold rush of a new Apple-spotlit market. If they do make a deal with Apple, they can find their negotiated deal being rather less beneficial than they imagined. The music industry was happy to work with Apple, until they realised the dominant position of the iTunes store meant they were no longer able to set their own prices on singles. The phone carriers fought over iPhone, but have discovered that its bandwidth demands and circumvention of their own media dreams have limited their own room for manoeuvre.
The rumours of Apple talking to cable and TV companies about their new TV should worry Samsung. But perhaps it should also worry those potential partners. At least Samsung knows Apple is entering its market. The TV companies may well be being led by Apple into a completely different world of TV entirely.
