On the iPhone's profit distortion field and Apple TV

Though I have faith that Apple isn't shunting the iPad due to its less-than-measurable sales against the iPhone, it's not the only other product in the company's wheelhouse. The Apple TV in particular hasn't seen a whole lot of love in recent years, even as company CEO Tim Cook proclaimed it no longer "a hobby" product. Jason Snell makes a good argument for why the Apple Watch might be more appealing to ship before a new Apple TV. From Six Colors:

The Apple Watch is the smart play for Apple right now. I recognize that. But I still have to lament the lack of progress in a product like the Apple TV. This is a product that's seen very little hardware improvement in ages, with software that's in desperate need of a rethink. It's been passed by in every way by its competitors. The only reason I keep my Apple TV around is because it's the only way to watch stuff I bought on iTunes and use AirPlay. I keep it around because it uses Apple's stuff, not because it's good.Could Apple TV be the best TV-attached box on the market right now? Sure it could, and maybe there's even an update in the wings that will make it that. Maybe it's even been a priority at Apple—just not the top priority. Could you look at the iPhone numbers and choose differently?

It's absolutely true that Apple TV has been on the slow track for several years, lacking in hardware upgrades while its potential competitors beefed up. Could that have hurt its chances to dominate in the market? Probably. But when you consider all the shifting pieces in play on Apple's board, that delay might actually be a good one — even if we believe that it's been done in part to bolster the iPhone.

For one, there's been a steady influx of superstar talent to the Apple TV team over the last eighteen months, and they seem to be staying with the product rather than being shuffled around to different departments. That points to significant work being done, even if that work is behind the Cupertino curtain.

There's also content deals to think of. Right now, all of the major set top competitors — Apple TV included — are using their own proprietary rental and purchasing system along with deals from various third-party services like Hulu, Netflix, and more. So far, most of the cable channel apps have required a cable subscription to use, but HBO's reputed stand-alone service is coming in spring 2015... and wouldn't that be a coup if a new Apple TV launched with HBO as its exclusive partner?

HomeKit is another consideration: The home automation service is just starting to see MFi materials for its hardware partners, and having a new Apple TV as, say, a June centerpiece for all those devices would be a great way to introduce people to HomeKit in the flesh.

Perhaps the silliest reason of all to focus on the Apple Watch before the TV is to offer its customers a new, hopefully better remote system. We know that Apple has an Apple TV remote app in the works for the Watch, and I suspect that the work being done on the device will actually feed the development of the set top box — especially when it comes to any potential Siri interactions or gesture-based viewing. In that way, the Watch might serve not only its profit-laden master, but also provide a strong hook into Apple's upcoming tertiary products and services.

Whatever Apple's reasons for the Apple TV's stagnation, it'd be hard to imagine the device doesn't have a significant upgrade in the works. But probably after the Apple Watch, and for good reason, too. After all, the company only has so many overworked engineers.

Serenity was formerly the Managing Editor at iMore, and now works for Apple. She's been talking, writing about, and tinkering with Apple products since she was old enough to double-click. In her spare time, she sketches, sings, and in her secret superhero life, plays roller derby. Follow her on Twitter @settern.

26 Comments
  • I personally just bought an Apple TV last month even though everyone on the internet seems to be waiting for a new model, but for what I wanted, its a very good device. I can Airplay all my TV apps using a relative's cable sign in to avoid having to pay for my own and throw all other videos up there when I want to veg out on the couch. Maybe I'm a simple man, but I haven't found anything other than the UI that needs updated. Its a fine addition to my living room that I wouldn't trade for any other streaming boxes.
  • AirPlay's my primary usage, too, but I have to wonder just how much more I might do on the Apple TV over my computer if certain things were available. Ah, idle speculation... :)
  • I'm still one generation behind with the Apple TV, the one before current. We are chomping at the bit ready to get the next one regardless of the new features. We do use it for Apple Keynotes and quarterly earnings reports, some video blogs, Airplay, iTunes Festival, iTunes Radio, and sometimes dabble in exploring some of the non-pay channels. We are considering cutting the cord for a second time and getting Netflix. I am expecting Homekit integration and significant deals with broadcast channels and I do believe that readying both is what is holding back the next gen Apple TV. The Apple Watch will integrate with the Apple TV, and that is a key part of the puzzle. The unit we have now works fine in the meantime.
  • I don't really understand why a company as large and rich as Apple couldn't find (or choose to allocate) the resources to do both the Apple watch and revamp/improve the Apple TV product. Why would one need to lament at all? Especially given the recent successes you'd think they'd want to move even more aggressively to own your attention (and your money).
  • There are many signs, in multiple areas of their business, that Apple over the last four years or so has been struggling to perform. Obviously they're not struggling financially, but they operate with less employees than other similar organisations, and they do everything with small, focussed groups of employees (sometimes to their detriment).
  • Yup. Despite all the cash, Apple still operates like a (very large) startup in some ways — small, focused teams being part of that. Plus: It doesn't get done until it can be done right. Minus: Sometimes it just doesn't get done.
  • They do it with other product lines (mac, iphone, ipad all developed at the same time) so there is no reason not to do it with the Apple TV. My guess is that the Apple TV doesn't generate enough revenue/profit for Apple to invest any R&D into it.
  • I'd say Apple's reason for not developing both products simultaneously has less to do with internal resources and more with marketing. No matter what Apple does, the tech media is only going to focus on one major product. The tech limelight right now is focused exclusively on the Watch. Until it's released, Apple really can't risk splitting coverage with another significant product. Once the Watch is released, and the tech media finishes beating every possible morsel of interest out of it, they'll fall back to their lazy "Apple needs to innovate more" meme. That's when I think you'll see Apple announce a completely redesigned Apple TV.
  • Great article and interesting speculation. The only possibly missing "clue" I would add is the fact that Apple TV is an entire section to itself on the Apple Store, which implies that multiple models of the product are coming soon. I would also add that the thing most of the services and channels that run on AppleTV haven't figured out yet, is that once you've cut your cable for even a short while, commercials are simply not on. In other words, not many people are foolish enough to be convinced a *second* time, that they should pay for a media service as WELL as allow advertisements. HBO would be more than welcome to me, (at some sub-Netflix price, say $5 a month?), but only if it is then commercial free. Turning the Internet into "cable TV 2.0" is not going to be attractive to any but the most foolish people and isn't going to stop piracy or cable-cutting in general.
  • As someone who makes their living as a partial result of advertisements, it's a hard balance. Ads are in some ways necessary to pay for all the money being dumped into quality television + backend support, but you can't flood the consumer or you run into trouble. Hulu Plus usually does a good job balancing this. Usually. When it doesn't want to show me seven ads before the next part of the show.
  • sling tv is the solution you are looking for.
  • What does "Though I have faith that Apple isn't shunting the iPad..." mean? Perhaps you meant to say "shunning"?
  • To push (aside), divert from the center, sidetrack :)
  • Yup, shunting's the one I was going for. Though shunning could perhaps work as well. English!
  • It's been so hard for me to resist pulling the trigger on an Apple TV. I'd love to do video AirPlay instead of propping my laptop on my media center and plugging in an HDMI cord. But it seems like an update is near, if not imminent. Can't wait to see how it integrates with Apple Watch and HomeKit.
  • Yeah, definitely something to wait on. I love it for AirPlay, though. So useful.
  • What's missing and most likely the holdup is the new hdmi spec and the uhd HDCP protocals. With more 4k tv's on the horizon and the competitors readying 4k output it makes sense not to rush and wait until everything is ready and be poised to cambat uhd blu ray when it debuts in the 4th quarter.
  • That's a great point — I hadn't really thought about next-generation specs, but it's definitely something I know the other box manufacturers have an eye on, and I wouldn't be surprised if it's also on Apple's radar.
  • I read late last year that 4K blu-ray had been scrapped. It would seem rather odd to launch a new physical media format when the world has clearly moved on and blu-rays were never a huge success.
  • The final spec for uhd blu ray was detailed at CES in January as well as the spec for uhd broadcast. Netflix and Amazon already have uhd content it would be silly for itunes content to stay at 1080p. Uhd blu ray and players should be available by holiday 2015.
  • That's surprising. Physical media is on its last legs, so to launch a new format now seems utterly illogical and destined to failure.
  • The Apple TV is an odd one. It's as useful as a chocolate teapot outside of America, so devoid is it of any local streaming services. Even for Americans the lack of Amazon Instant Video is mind boggling. As a piece of hardware and UI design it's also hopelessly outdated and antiquated. It belongs in a museum. Unless Apple can do something really revolutionary then the streaming sector may end up being completely dominated by smart TVs.
  • I completely disagree. We love our Apple TV, and use almost everyday. Sent from the iMore App
  • I briefly had an Apple TV in several rooms, but I discovered that I was only using Plex and Netflix apps on them. I ended up selling them because my gaming consoles could (as of last fall) do the same thing, making apple tv's redundant.
  • Keeping the faith that we will have a spring event in late March and they'll roll an update out alongside the apple watch. If they could get at least an A7 chip and a couple of gigs of RAM in it we could see some great decent gaming potential and home automation control. It might be nice to get a couple of hundred GB of internal storage to compliment gaming. If we don't see a significant update this year I just don't know how they can keep it relevant after laying fallow for so long.
  • I ponder smaller iPhone sizes in the world of bigger iPhone sizes. I sure hope I can still buy a relatively small iPhone when it's time to upgrade my iPhone. Apologies for the divergence.