Recently at the D: All Things Digital conference Time Cook, when asked about the various Apple TV rumors, said that TV is “an area of intense interest for [Apple].” In the past Steve Jobs referred to Apple TV as a hobby and ever since then Apple fans have been waiting to see when, or if, it would graduate from hobby status to center stage along side the iPad and iPhone (though I doubt there is anything Apple TV could do to steal the limelight from the those two).
I think the TV market right now is a very tough nut to crack (both from consumer electronics and content distribution stand points). On the hardware side you have a number of device makers that make it very easy to stream Internet-based content to your TV set. Besides the Apple TV set top box you also have similar devices from Boxxee, Roku, Western Digital, Seagate, inexpensive Internet-ready Blu-ray players, Internet-ready TVs and video game consoles (Sony, Microsoft and to a lesser extent Nintendo have added powerful home media capabilities to this generation of consoles).
Another hurdle on the hardware front is that a TV is a large purchase that is typically made infrequently. I know Apple makes some great devices but I doubt the trend they started with the iPod (getting a large amount of people to upgrade every year or two) is going to fly when it comes to large, expensive TV sets. Especially now that the HDTV set market is mature (no more analog vs digital issues, etc.,) and the TV set makers have pumped in so may features that TVs are nearly all-in-one home theater PCs.
On the distribution side (which is changing as fast as the hardware) the situation doesn’t look much better. The key to success, IMO, is content and I’m not sure how Apple is going to secure enough exclusive content to warrant purchasing their device instead of a competitors that basically has all the same features (and more if you are talking about a Blu-ray player or video came console). If you are HBO or the NHL or Netflix you don’t really care what devices people use to watch your content as long as people are watching your content. I think that makes it harder, or at least more expensive, for Apple to leverage content deals.
Even though this post sounds pretty sour on Apple’s chances I wouldn’t put anything past them. iTunes was the killer feature that helped move iPods in record numbers. Apple’s App Store & iOS dev community helps keep the iPhone at the front of the smart phone pack. What is going to be the killer content feature that separates Apple TV from the rest of the pack and launches it from hobby status to center stage?