The Register®

Original URL: http://www.theregister.co.uk/2010/05/28/apple_tv_rumor/

Apple TV said to enter the heavens at $99

More than a Jobsian 'hobby'

By Rik Myslewski in San Francisco

Posted in Hardware, 28th May 2010 23:02 GMT

Watch Now : Virtual Machine Movement with Hyper-V

Steve Jobs' "hobby" — the Apple TV [1] — is slated for a radical revamp, an extreme price slice, and a future in the cloud, according to "a source very close to Apple."

Engadget reports [2] that the next version of the Apple TV will run iPhone OS 4.0, have only enough on-board RAM to function as a conduit to the cloud, and will cost a mere ninety-nine bucks. Today's Apple TV runs a cool $229.

Running on Apple's A4 processor, the new Apple TV will essentially be a next-gen iPhone without the phone — or an iPad without the pad — and will be capable of decoding 1080p HD video and pumping it out to an HDTV. Whether or not the package will have a cursor-controlling remote [3] as described in a recent Apple patent [4] wasn't mentioned.

The interesting part of this rumor is that unlike Apple's current buy-'em-and-download-'em local storage scheme for iTunes Store content, the purported next-gen Apple TV will presumably suck content from our ol' buddy, the cloud — although Engadget's source also says there will be an optional Time Capsule [5]–based local storage option.

More and more, the digital tea leaves that one must consult to divine Apple's plans point towards a cloud-based content future. There is, of course, that $1bn data center [6] that's nearing completion in Catawba County, North Carolina. Then there was Apple acquiring [7] then shuttering [8] the online music-streaming service, Lala. And as we've mused [9] before, the locked-up-tight iPad appears to be designed for cloudy content communication.

Not that Jobs & Co. will waltz merrily into command of the online-content market. Just last week, Google announced [10] its own online-TV effort, which Mountain View's Rishi Chandra described as "where TV meets web, and web meets TV." Google is backed by Dish Networks, Sony, Intel, and Logitech. Even mega-retailer Wal-Mart wants in on the game, after acquiring [11] IPTV hardware, software, and services vendor Vudu this February.

Wal-Mart's Vudu pick-up gave the Arkansas giant access to that company's relationships with content providers. Google's got YouTube and the partnerships that come with that. And of course, Apple's iTunes gives Jobs a content head start in negotiations with, for example, CBS and Disney, as The Wall Street Journal reported [12] last December.

On the other hand, Jobs' vendetta against Adobe Flash is causing him to be rebuffed [13] by Time Warner and NBC Universal, according to Friday's New York Post, because those media giants aren't keen on going through the time and expense of converting their massive Flash-based video libraries.

If Engadget's source is correct, The Reg admits to a bit of puzzlement over the purported $99 price point. As Apple execs have admitted [14], as currently configured the iTunes Store is essentially a break-even business that's designed to lure customers into buying Apple hardware and developers into building apps that also sell hardware.

But at $99 a pop, Cupertino won't make beaucoup bucks from Apple TV hardware. There needs to be another way for Apple TV revenue to help pay for that $1bn data center — so we're willing to bet that Jobs will structure content deals and set consumer pricing such that as video and movies stream into a new Apple TV, a healthy flow of dollars will stream into Cupertinian coffers. ®

Bootnote

Steve Jobs first publicly used the word "hobby" to describe the Apple TV business in an interview [15] back in May 2007 — a term reiterated [16] by COO Tim Cook this February. In 2007, Jobs told the interviewer: "I use the word 'hobby' because it's provocative."