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Viewing report
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Apples Play for the Living Room On the Future of Apple TV® and the iTunes® Movie Download Service
The Diffusion Group, April 2007, Pages: 61
Apple TV - the iPod of the living room? As Apple's first dedicated living room platform, the world is watching to see if the company can help bridge the gap between Internet video and the center of the home entertainment universe - that is, the home TV.
While Apple didn't invent the digital music player (DMP) or the business of online music, it single-handedly spurred market growth and brought these concepts into the collective consciousness. Can it do the same thing for the online movie download market and Internet/CE bridge platforms?
Apple has the technology and marketing acumen to create demand for products and services where none existed before. But unlike the music market, developing (much less conquering) the online movie download business will prove more challenging for Apple.
Apple's Play for the Living Room - On the Future of Apple TV presents the most complete research available on Apple's movie-playing hardware and likely demand for iTunes-based movie downloads. Key reading for hardware vendors, movie studios, and both online and legacy video service providers, the report provides:
- A detailed discussion on the addition of movie downloads to Apple's iTunes service.
- Comprehensive research on consumer interest in an Apple media adapter serving movies to the living room TV.
- A technological and demographic profile of those interested.
- Detailed forecasts for unit sales of Apple TV through 2011.
This report is the latest in a long line of in-depth research produced by TDG and aimed at understanding what makes Apple successful - as both a business and a technology innovator - and where its flaws may lie.
Three Key Findings
- Existing Apple owners are twice as likely as others to use a online movie download service that extends to the home TV.
- Interest in and demand for Apple TV drops sharply at $300 or more per unit.
- Sales of Apple TV will remain below 12 million even through 2011 - a much more modest growth than that experienced by the iPod.
Report Excerpt:
As Apple celebrates its 30-year anniversary, it finds itself at a very unique moment in its specific history and that of the consumer electronic space in general.
During this time, Apple has evolved from a niche PC manufacturer with a unique following to a global leader in portable consumer electronics and online digital media. Given this unbelievable success, however, investors are impatiently awaiting Apple's next move. It can't continue its rapid growth with the iPod alone, so investors are expecting Apple to exploit other areas of consumer electronics and digital services.
As many TDG clients are aware, we have argued for several years that Apple would turn its focus to the digital living room sometime in 2007; so Steve Jobs' announcement of the Apple TV at MacWorld was not surprising. Of course, that's just the hardware part of the equation and those familiar with Apple know that its recent success is closely tied to binding a digital service (e.g. iTunes) to a specific platform (e.g. iPod) - a strategy we expect to be used for Apple's entry into the living room with the Apple TV.
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