A couple of thoughts that occurred today while listening to the classic argument against Apple building a physical TV:
People don’t replace their TVs every two years like they do with iOS devices.
Now, this argument is predicated on two hypotheses:
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Apple wants to create identical market structures to the current iPhone/iPad markets
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Apple isn’t interested in any new market that is smaller than the iPad.
These arguments are predicated on the idea that Apple will only ever open new markets in order to “move the needle” which is going to be awfully difficult at their current scale. I think that Apple’s motivation is exactly what they say it is: building great products and revenue will flow from there. If they think that they can build, distribute and sell a phenomenal TV, then they’ll do it. I still have a number of doubts about it, but the market is ripe for disruption. The current concept of the TV set has become a pure commodity, despite all of the efforts of the existing players to build “connected” TVs.
The second thought is to turn the argument around. It’s true that we don’t replace our TVs at the same rythm of other electronic devices, but that may in fact be a very good reason to be in that market. People that invest in an Apple TV are going to be predisposed to living and buying in the Apple ecosystem and that device will be their primary Apple screen in the home for a longer time. When you decide to buy a new tablet or computer, you will take a look at all of the choices so you could be convinced to move to a Windows 8 tablet if the hardware and software is sufficiently compelling and this choice comes up more frequently than the TV purchase. This is also one of the reasons that Apple has been so successful in disrupting the telephone market due to this rapid lifecycle. The RIMs and Nokias thought that they were impregnable and unassailable, but people have many more opportunities to jump camps with the regular two year contract cycle and they completely failed to anticipate the market changes introduced by the iPhone (demanded by consumers) and Android (demanded by carriers).
Also Apple is known to try and skate to where the puck is going to be and not where it is right now. Currently the TV networks have a stranglehold on the content distribution but we are starting to see the first stages of cord-cutting, combined with innovative production models for new content that bypass the existing networks. Should Apple build such a TV, it will optimize for these new content streams rather than the legacy model.
The disruptive approach would be to provide something just good enough to handle the legacy TV content model, but push forward new and interesting use cases that simply aren’t available elsewhere.