Wed, 07 Sep 2011 Apple TV set has 'got to happen'

A former president of Apple's products division has added fuel to speculation that the Cupertino company is working on a TV set, writing that such a development has "got to happen."

"Imagine a true plug-and-play experience," writes Jean-Louis Gassée, now a partner with venture capital firm Allegis Capital, in his Monday Note blog. "One set with only two wires: power and the cable TV coax. Turn it on, assert your Apple ID credentials and you’re in business. The program guide looks good and is easy to navigate; pay channels are just a click and a password away. The TV runs apps, from games to FaceTime and Skype, it 'just works' with your other iDevices and also acts as a WiFi base station using the cable provider’s Internet service."

"The idea is exciting and so obvious it's got to happen," he adds.

Rumours of an Apple TV began to crop up last year, but they recently garnered new life when a noted Apple analyst, Gene Munster, of Piper Jaffray, said, based on information from component manufacturers, that such a device was in the works. In addition, the company has reportedly made a mystery expenditure of $3.9 billion on supply contracts for "component parts." Such an amount would be more than enough for Apple to obtain the LCD technology it needs for a TV, according to Munster.

Jean-Louis GasseeAs exciting as an Apple television may be to some, even Gassée sees some formidable challenges to the idea that must be surmounted before the product is brought to market.

For one, it's assumed that such a device would use a CableCard. CableCards plug into the back of a TV set and perform the functions of a set-top box. The devices have never gained much traction in the market. Critics say it's because cable TV companies are incompetent when it comes to new technologies, but Gassée maintains there may be another reason for slow adoption.

"Carriers looked at the CableCard and saw complicated field service calls in their future," he writes. "A separate, outboard set-top box is easy to diagnose and fix; a card inside the TV set, not so much."

"It generates a host of hard-to-understand bugs," he continues. "Is the card working? Is it kind of working but causing the TV to malfunction? Is the TV working but killing the card? and so on. More calls, more finger pointing, more expensive field techs."

Another problem with the kind of smart TV that Apple would presumably produce is that it is aimed at a "dumb" system. Cable TV systems—especially large systems—are a patchwork of acquisitions. Because TVs are relatively dumb as devices go, incompatibilities within the systems have never posed much of problem to cable providers. Such incompatibilities could restrict the market for an Apple TV to a limited number of cable providers. Or worse, "make the product more complicated and prone to more bugs—and more field tech visits," Gassée writes.

Then there's Moore's Law. In computer circles, users are accustomed to frequently buying new products because of rapid technological improvements. Television owners, on the other hand, don't have that mindset. "Once a family shells out for a nice 1080p set, it’s difficult to sell them the new improved model next year," the former Apple exec writes.

Nevertheless, he maintains that the concept behind an Apple TV remains a valid one. Gassée isn't alone in thinking that. It appears to have been a good enough of an idea to prod Google, despite the miserable performance of its TV set offering in the United States, to expand its offerings to Europe.

Without a doubt, the prospect of being outflanked by Google on the TV front is a powerful incentive for Apple to cover all the bases in the living room. But there might be something else driving Apple's desire to bring a television set to market. It's the company's mantra: "it just works."

One of the reasons that Apple's set-top offering has received a tepid market reception is that it's technologically challenging to many couch potatoes. An Apple TV could remove that complexity and provide the missing link between the computer and the living room that's been so elusive for high-tech companies. If that were the case, the Apple TV, by achieving what seemed to some an "impossible dream," would be a fitting crowning achievement to the legacy for Apple's ailing founder Steve Jobs.