Monthly Archives: June 2010

1. Price
   There’s a world of difference between seven hundred and one or two or even three hundred dollars.  This is even more the case in the icing room as opposed to the ipad or mobile devices, where theres no precedent or parallel for the product.  Further people evaluate living room stuff extremely differently, and seven hundo is like buying two xbox 360s.  Too much.  In fact, you can truly skip the entire rest of this piece, since this price is an utter non-starter for this discussion.
2. But what about HDMI?
   Just because the product has hdmi doesn’t mke it a living room product.  Sure front row or Boxee will have that effect, but there’s a radical difference between a purposeful and incidental use case for a device like this.  Hdmi is there because it’s replaced dvi as the digital video standard, and because a huge screen does make a beautiful monitor.  An interconnect does not alone a product make, otherwise I’d be comparing the Mac Mini to a router because it has an Ethernet port.
3. Software
   Per the above comment, today it’s front row or nothing, from apple direct.  Yes, users can download Boxee or plex, but to think consumers en masse will throw down seven hundred dollars for this solution is way off the mark.  For that purpose, they’d just buy an apple tv, or a roku or a wdtv, etc.
4. But what about New Software?
   Okay, it’s fairly naive of me to say the future of this scenario is the existing version of front row.  Obviously they’ll rev it, and lets assume the rev is solid.  Per all the above points, it doesn’t matter how much better it is.  It’s not about a “better experience” when we are talking the price point.
5. The Apple Way
   Apple makes products with high margins, mass appeal, and excellent software.  A seven hundred dollar apple tv is only one of those things, and at best can get to two.  Why would they make such a bizarre strategy shift here?  It’s not, at all, the apple way.  Far from it.
6. Consumers and boxes
   Most consumers don’t buy extra boxes for their living rooms.  They buy TVs, game consoles, and media playback devices (the cheapest of the bunch).  When they do buy add ons, they tend to be under $300, such as the slingbox, roku, or wdtv.  In these cases, the value add for the price point is clear.  So looking at the new Mac mini from the lens of ‘what new content or services does this bring to the living room?’ the answer is practically nil.
7. Consumers and content
   Cable tv (and by that i include satellite and other existing offerings) is, on average, pretty good.  The average American has access to tons of content, both on broadcast and on demand systems, not to mention whatever they are dvring.  Throw in a dvd player and a game console, and the content universe is quite outstanding.  The quantity of people who truly want to throw away their existing stuff is really really small.  Its not to say there isn’t room to add in more, but its not seven hundred dollars worth more in any consumers’ eyes. For a box that expensive to earn a spot in the living room, it must supplant existing content offerings in such a way that consumers clearly perceive the value.  So not only is a brand new software package a requirement, but a massive increase in content, especially free content, is as well.

But What If?

If apple discontinued the apple tv line, this would have a shift, but only a minor one.  In that scenario, I’d imagine the opportunity truly shines for google tv products and the Boxee box by dlink (full disclosure: I consult with dlink), as they will offer similar value propositions but at steeply discounted prices.  And unlike the comparisons between the iPad and the janky tablet rivals, these other products are far more likely to show promise and value.  Still doesn’t add up.

A man talking about the same topic, in video form:

Watch live video from Jeremy Toeman on Justin.tv