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Wednesday, September 13, 2006

Reflecting on iTunes 7 and the "iTV"

Yesterday Steve Jobs presented Apple's new hardware and services in California - full coverage here from Engadget.

The two big pieces of news are movie downloads through iTunes 7, and forthcoming piece of hardware - currently known by its development name of "iTV" - that will stream content from your PC or Mac to your TV. Let's look at each in turn, then the bigger picture.

iTunes 7 movies will be in 640x480 resolution, somewhat less than DVD's 720x480, but probably acceptable to the eye. Prices will be a little less than shop-bought DVDs at $9.99 for existing movies and $12.99 for pre-orders and movies bought in the first week of their release, but it doesn't look like you'll get any of the extras you get with regular DVDs. You won't be able to burn the movie to a DVD, but you can store it on up to five computers at any time plus iPods - should take care of back-up duties.

The iTV is a wireless device that takes your music, photos and of course iTunes movies from your computer and displays them on your TV. It will cost $299.

Now, you can already do this - and a lot more - via PCs running MS Windows Media Center Edition and Media Center Extenders available from HP and Linksys, or through Xbox 360 game consoles. For example, you can rip your existing DVDs, or put a TV tuner (up to three, in fact) into your PC and use it as a PVR. It doesn't look like either of these functions will be possible with the iTV.

Yet the HP and Linksys Media Center Extenders haven't been a success. It now seems they are being run-down and Microsoft is concentrating on using the Xbox 360 as an MCE - except many people who would wish to watch their media on a TV don't want a games console.

I think the iTV will fare much better than . Apple is running its business the way you shouldn't - supplying a vertically-intergrated, end-to-end experience and making no effort to work with other companies. You buy an iPod and use the iTunes software to buy music from the iTunes Store. Everything has the same basic look-and-feel - the familiar Apple brand - and Apple also know a thing or two about quality and usability. So it will be with the iTV. Expect to see it heavily promoted, just as iPods are, and expect to see it take pride of place in Apple's many retail stores. Unlike MCEs but like iPods and iTunes, iTVs will rapidly enter the national consciousness, and people will start buying and using them.

PS, interesting to see that ThinkSecret was spot-on with its predictions on what Jobs was going to unveil.

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I think that Apple will be succesful in this effort as they are coming along at the right time. I do not think though that you will see the adoption and success as seen in the IPod. The reason is I think we are at the tipping point for a number of approaches. There has been reasons that we have not seen huge adoption of this kind of technology up to this point and my thoughts on that are as follows (all comes down to bandwidth):

To date there are more than 14 million Media Centers in homes. As price point has dropped adoption has followed the curve increasing in numbers. Every Xbox 360 sold is a full blown Media Center Extender out of the box and for non Media Center PCs can still stream content like music, pics, etc. so there are now literally millions of extenders deployed to homes. The biggest blocker to successful use between a computer of any kind/OS/Brand and an extender type device has been bandwidth. Most people have gone with wireless G setups in their homes. Wireless G is affected by microwave ovens, cordless phones and more not to mention walls and floors. It is just not a good medium for rich media transmission. I have 5 extender devices in my house that run flawlessly but I had my house hard-wired to overcome the limitations of today’s wireless (see http://www.mikeysgblog.com/Lists/Posts/Post.aspx?ID=75 ).
My guess is that Apple, having not specified the exact protocol of transmission is waiting on the final ratification of the next gen wireless before you will see their extender type device come to market. At that time though expect to see a wide range of similar devices from other vendors like DLink, etc who are already providing devices like that today albeit on the lower transfer rate G wireless. By waiting on this and coupling their targeted video resolution of 640X480 they should be able to ensure a smooth delivery of video from a computer to a single end-point device. (the newer wireless specs will support high def transmissions as well but Apple will not be supporting this)
In the meantime with the release of Windows Vista you will see not only another ramping up features with an emphasis on High Definition content becoming more pronounced but you will see that being the most common version of Windows on all preloaded PC's making it pervasive in more than 92% of the market. Couple that with the millions of Xbox 360’s sold and the millions more projected to sell and with the same next gen wireless that Apple will also be taking advantage of and I think we are at the tipping point where you will start to see more of this become commonplace. Up until now it has been an early adopter scenario due to bandwidth and network requirements but with new wireless on the horizon that will change for many.
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