Feeds

Steve Jobs: struggling to redefine the TV paradigm

The devil is in the detail for Apple TV

High performance access to file storage

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.

SANS - Survey on application security programs

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Ex–Apple CEO John Sculley: Ousting Steve Jobs 'was a mistake'
Twenty-nine years later, post-Pepsi exec has flat-forehead moment
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.