Feeds

Steve Jobs: struggling to redefine the TV paradigm

The devil is in the detail for Apple TV

Security for virtualized datacentres

It doesn't matter how Apple TV (or the PC or the Mac or the iPod) manages the rental, because that technology is easy, but insiders told the Think Secret website that downloads will be date stamped and restrictions will placed on the number of playbacks or the time period for playback. It does sound a little too much like the CinemaNow and MovieLink failed business model for our liking, but if it can be scaled and pulled off by any company, it's Apple. It would be far better if the rentals have a 72 hour playback or longer, rather than the 24 hour limits of those prior services. Better still would be a multiple number of plays.

The nice thing is that the Apple TV only has to have virtually all the same code as a video iPod, and it can use the existing DRM, Fairplay, in its current iteration, to look after the playback and encryption. And so when iSuppli, the US teardown specialist, says that this is pretty much what Apple TV is, a video iPod with resilient wi-fi, then this fits the picture.

The device turns out to be an old Intel processor, the 1GHz Pentium M, worth $40, an Nvidia graphics chips, the GeForce Go 7300, worth $15 by iSuppli estimates, and components that just anyone can buy on the open market. Even the Wi-Fi is not radically different, but the Wi-Fi in the new Apple AirPort Extreme wireless routers handles the video resilience.

The conclusion that iSuppli reaches is that this device is priced to be at as low a price as possible with a margin of just 20 per cent on the $299 product. That means that anyone trying to copy the Apple TV route to market has to find a retail environment that is prepared to accept an incredibly low margin, and of course they won't. And iSuppli says this doesn't take into account the costs of cables, packaging, and marketing, so Apple's actual margin is actually even less.

Apple just about has the sales power to sell the Apple TV online and from its own retail stores and is expected to get just a million devices out there this year, because that appears to be the component volumes that Apple is ordering. But if a rental online movie service becomes viable and has that old Apple magic, then those order numbers can easily rise.

iSuppli is right in pointing out that Apple usually wants a 40 per cent to 50 per cent margin on its devices, but that in this case it is prepared to accept far less, because it means that a) no one else can follow the strategy through a retail set up, and b) that it needs the combination of Apple TV and rental video iTunes together to spark the next revolution. It is after volume here, not profit.

But what everyone is saying is that the Apple TV is NOT a DVR. By that they mean that it does not allow copying from broadcast TV. But if you go back three years to when Akimbo first introduced its service, it was a $250 set top that stored programs sent to it over the internet. But it WAS thought of as a DVR despite not recording from broadcast, and it soon amassed 15,000 programs or so that customers could rent. Apple TV is digital, and it does record video, it's just choosy about where it records it from.

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
NATO declares WAR on Google Glass, mounts attack alongside MPAA
Yes, the National Association of Theater Owners is quite upset
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.