I’ve flip-flopped better than a politician on this topic, but just read an awesome piece that I wanted to share. Highlights are:
Most fundamentally, all assumptions about Apple seem to stem from a misunderstanding of how differently Apple thinks and operates from everyone else.
For starters, Apple doesn’t chase markets just because they’re there. Nor do they get sucked into market share battles just so they can say they sold the most units (see: iOS vs. Android).
In other words, for an Apple TV to be free-flowing with first-tier TV content in the same way that an iPod flows with first-tier music, Apple will need DIRECTV and/or Comcast to bless it.
ESPN, after all, earns $4.69 per subscriber household in affiliate fees on each and every cable subscriber. Apple’s good friend, Disney, owns ESPN, ABC, Disney Channel and a slew of other channels. Disney simply isn’t going to throw billions of dollars away in affiliate fees just so they can help Apple. All of the major TV content players view the world similarly.
So where does that get you when you connect the dots? I’ll tell you where it doesn’t get you … to a television-like device that:
- Is priced 2-4X the cost of an iPad.
- Has sales cycles of one device every 5-10 years.
- Has bad margins.
- Has a serviceable form factor that for many people is good enough. (Apple challenges industries where the baseline experience is terrible. Television hardware wouldn’t seem to qualify.)
I strongly recommend reading the rest of it as well, one of the best perspectives I’ve seen on the topic of Apple in general actually.