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Expect a wave of Apple TV imitators waving Atheros chips

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But if Apple wanted to use the same technology from someone else, it would have to be someone that bought a royalty yielding license from Atheros, or it would have to use a slightly different technology. And anyway it has no need, this early on in its life, to look around for alternative suppliers.

But Atheros is certainly big enough, with revenue of $300m plus, and a valuation at over four times revenues plus cash in hand, at $1.4bn, and holding cash of $186m, to supply not just Apple, but every other potential Apple TV rival on the planet.

In our view the ability to shift video with quality of service protocols and zero drop out of voice over Wi-Fi signals, alongside image delivery, game data, and high quality audio, will create the next Wi-Fi war. The 802.11n standard is not enough of an innovation for a Wi-Fi chip maker and companies like Broadcom must immediately come after the Atheros MIMO lead as fast as it can, perhaps by bidding or the company, or by its usual method of entering the market and driving down the manufacturing cost.

So while Apple may get the public credit for "inventing" this technology, all the innovations that we discussed, DVR capability, bigger disks, multiple video formats, higher definition, DVD burning, direct store access, these will ALL come, if not necessarily from Apple, but from the fact that the time for this technology is now and there are multiple technology suppliers ready to address the underlying technical issues with commodity products.

Getting back to the actual Apple TV product, it allows synching with a PC or MAC to copy not just movies but also TV shows, music, photos and podcasts, and these are prioritised in that order. If you have more than 40GB of movies on your PC then only the movies will get onto the Apple TV drive. It comes with an Apple Remote and connects to most widescreen TVs.

From iTunes alone Apple points out that you can have access to 400 movies, 350 TV shows, four million songs, 5,000 music videos, 100,000 podcasts, and 20,000 audiobooks. Think how much more content is out there on other internet sites.

The 40GB hard drive is said to store 50 hours of video, 9,000 songs, 25,000 photos, or a combination of each. Apple TV connects using standard HDMI, component video, or with analog and optical audio ports.

It costs $299 in US stores and requires iTunes 7.1 or later running on a Mac with Mac OS X version 10.3.9 or later, or a Windows PC with Windows XP Home/Professional. It needs Airport Extreme or if you walk in front of the signal your video will stop while the buffer refills.

It's worth noting that some Apple sites have noticed there are error messages built into the system talking about downloading games to the device, speculating that Apple TV will become a platform for casual gaming.

It makes a lot of sense given that at present its primary rivals are the major games consoles, the Microsoft Xbox 360 and the Sony PS3, which both can have high definition DVD players attached, and hard drives and which are both expected to offer video over an internet line. These are likely to offer video that is limited to their own stores, but the potential for generalised internet video is there as is the potential to tap existing video Wi-Fi technologies like those from Atheros. ®

Internet Security Threat Report 2014

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