Original URL: http://www.theregister.co.uk/2012/02/21/connected_tv_market_trands_make_apple_itv_a_certainty/

Smart telly trends make Apple 'iTV' a certainty

Cupertino would be mad not to

By Tony Smith in Hamburg

Posted in Hardware, 21st February 2012 11:05 GMT

It's no longer a question of whether Apple will produce a TV - the so-called 'iTV' - but when. That's the clear conclusion to be drawn from an analysis of TV technology trends provided by DisplaySearch, a market watcher, at Panasonic's 2012 Convention today.

Starting inside the box and working out, we're at the stage where phones, tablets and TVs have the same core content presentation capabilities: they can all work with HD content, even if some of them lack the pixels to present it at full resolution. This derives from the use of the common building blocks: low-power CPUs and GPUs merged into system-on-a-chip parts.

TVs didn't use to have such sophisticated technology on board, but the need to offer a broader array of content, almost all of it coming from the internet, than broadcast television alone, and to present it with an engaging UI, is making TVs internally more like computers. Not every set will be a so-called Smart TV, but more and more of them will be, especially in established markets.

At a basic level, then, TVs, tablets and smartphones - thinking of them as content presentation devices - are now all but identical. Only the size of display they incorporate separates one from the other.

Even tellies need to be dual-core, Panasonic said this week.

It's not hard to envisage, then, punters simply using all of these devices according to the needs of a given moment. TV for home viewing in company; tablets for viewing outside the home or within it in rooms where there is no TV; and phones for ad hoc viewing on the move.

Apple has two of these devices in its product portfolio, so why not complete the set? Especially since these devices will increasingly complement each other in other ways too. Apple was one of the first companies to offer a smartphone app for controlling its set-top boxes, but there's an opportunity to extend this so the app doesn't merely replace the traditional remote but takes on a role the old button boxes can't.

How about allowing a remote app to change a device's settings without interrupting what's being shown on screen, so you can tinker with the sound or colour balance without annoying your other half? Or to continue watching your favourite show on the smaller screen while you fix yourself a drink or nip to the loo?

Need to key in an internet address or a search string to find a programme on BBC iPlayer? That's easier on a smartphone or tablet than a regular remote. Who wants a separate Qwerty deck for these occasional text entry instances? Voice control and gesture recognition technology are advancing, but they can't yet simplify the complexity of a fully internet-friendly remote control without significant compromise.

The explosion of content sources which has driven this need for better control tech has also revealed the need for new approaches to content discovery. In a world of thousands of channels, EPGs quickly become unmanageable. Technology can hide that complexity, to provide not only a more simple but more personal EPG, and one that ties into diverse information sources, from reviews to Twitter hashtags.

This isn't a problem only Apple is able fix, though its UI development heritage puts it in a strong position to do so. But it does have an edge in delivering content in an easy to access way. The iTunes App, Book, Music and Movie Stores show that, and the company is said to have undertaken an attempt to streamline these even further.

Having, recast these services as cloud-based providers - getting an item of content onto a device is no longer a once-only process, though it really needs to enable streaming as an alternative to downloading - it can feed content to a TV as easily as to phones or tablets.

Telly vision

Likewise, its AirPlay, Bonjour and other networking technologies are already present to make moving and streaming content from any one of the trio of devices to another easy and largely set-up free.

Of course, it's already doing all this, through its Apple TV set-top box, so why should Apple go the whole hog and build the box into a large display?

Here DisplaySearch's data shows a clear pattern: media streaming boxes have not proved a big hit. Apple TV remains a "hobby" product for Apple - translation: it sells in relatively low numbers. DisplaySearch figures for the time users' spend watching online video content presented by different devices shows media streamers well behind Blu-ray players and even further behind games consoles.

Media streamers may be cheap, says DisplaySearch analyst Paul Gray, but many Blu-ray players are barely more expensive and deliver video streaming as well as higher-quality optical disc playback.

DisplaySearch forecasts that media streamer shipments in Europe will struggle to exceed three million units a year over the next three years or so. Blu-ray player sales will have gone past 10m units by 2013, while games consoles average 27m units through to 2015.

But Smart TV shipments will grow from over 30m units this year to 50m in 2015. Even if Apple remains a very small minority player in the Smart TV market, it's going to sell a lot more tellies than set-top boxes.

And with European tablet sales forecast to grow even more rapidly - from 24m in 2012 to 50m in 2015 - Apple is in a strong position not merely to subsidise its early TV endeavours through iPad sales but also to leverage the latter to encourage TV sales.

Of course, today's TV vendors will be doing the same thing, some successfully, others less so. Unlike Apple, though, they'll be starting from a less tightly defined ecosystem. TVs have evolved by accumulating features and technologies, and that has led to inconsistencies that frustrate users. A given TV may play AVI files, for instance, if they're on a drive plugged into one of its USB ports, but not when streamed from a network share by DLNA.

Techies may, not unreasonably, complain about the relatively limited array of standards Apple supports, and the walled garden, but there's not question these things make life easier for folk who have bought into the Mac-iPhone-iPad ecosystem. Content plays, subtitles appear; there's no confusion between codecs and container formats.

So Apple is well placed to address the key challenges TV vendors have to face: the arrival of internet TV and the need to mediate and manage this profusion of content; and the growing similarity between the chips that sit behind the screen, whatever size it is.

Address this consumer need and the business case for entering a depressed, margins-pushed-to-zero-or-less market - which is what the TV arena is at the moment - is a lot stronger. Throw in the cost savings of cross-fertilising phone, tablet and TV hardware and software, plus the brand's price premium, design abilities and some advanced display tech for good measure, and you have a recipe for success.

Apple would be mad not to release a TV. ®