Apple's iTV Set for September Launch With iAd-Supported Channels, iPad as Remote?

[BaldiMac]

You seem fixated on just this one little piece (the rumored price), and continue to imply that it is virtually impossible.

Fixated? It's the only surprising part of the rumor. None of the rest of the rumor is interesting to me because it all seems obvious except for the possibility of apps. Based on iOS? So is the current version. iPad remote? Not really a stretch since we already have an iOS remote. iTV name? Who cares?

Sure it adds that there will be apps. Will they have to be developed specifically for the iTV or will it support apps developed for the existing touch-based iOS devices? That's the big question to me. I'd bet on only iTV specific apps with remote-based input with easy ways for developers of apps that would make sense on a TV to convert their apps to the new UI. Possibly a way to output certain apps on an iPhone to the iTV - maybe through an iTV companion app. Remote possibility of a Wii-like remote that would map more closely to touch-based input.

Perhaps we should clarify some math then? Some of your comments reads like "Apple margins" is some hard number, when in fact, they are merely a percentage of sales. Apple seems to like margins in the 30%-40% range. For the sake of this, let's dismiss the idea of trying to price this on the low end and cut it down the middle. That would be 35%. What does the case, chips, ports, etc have to cost to yield 35% margins at $99?

About $74.

You need to check your math. 35% margins on a $99 device would imply materials and manufacturing costs well under $65. As I pointed out from iSuppli's iPhone 4 breakdown, an A4, 16 Gb of Flash, and a Wifi chip cost $60. $5 for the case, coprocessor, power supply, inputs, outputs, ethernet, remote, manufacturing, packaging, etc. is not reasonable. And that does not include IP such as patent licensing and software.

Lastly (but probably unlikely), Apple could take the razor blade approach and wash out much of the margin on the hardware, with a goal to make up for it on the software sales. Lots of iTV's in the home will be a tempting vehicle through which to buy iTunes content on demand... and maybe this iTunes subscription program. On the other hand, price it too high (again) for the masses, don't sell many of them (again), allow other internet-connected devices to entrench in volume, and have a near ZERO chance of the owners of those other devices buying/renting their media via iTunes through the little boxes connected to their HDTVs.

Why is that unlikely, especially considering that they are doing that with the current AppleTV?

 

[HobeSoundDarryl]

You need to check your math. 35% margins on a $99 device would imply materials and manufacturing costs well under $65.

Sorry, in haste, I did the cost times 1.35 method for quick math. My mistake. I'll take your $65 then. I still believe it can be done.

As I pointed out from iSuppli's iPhone 4 breakdown, an A4, 16 Gb of Flash, and a Wifi chip cost $60. $5 for the case, coprocessor, power supply, inputs, outputs, ethernet, remote, manufacturing, packaging, etc. is not reasonable. And that does not include IP such as patent licensing and software.

Why 16GB of Flash? The first one doesn't have a big flash buffer because it has a hard drive. But this one is supposed to be all streaming. Why do you have to put 16GB in there?

Why does it have to use an A4? It doesn't have to juggle as much as an iPhone 4, or 3GS, etc to do it's thing. They can do what they did before and use something lessor than "latest & greatest" for what should be a simpler device.

Again, look at a relevant example that also has a case, coprocessor, power supply, inputs, outputs, remote, ethernet, manufacturing, packaging, IP, etc AND is retailing for $89.95. Can Apple not get all those parts & pieces for around the same cost as Western Digital? Does Western Digital have some great advantage over Apple that it can build and package a little box with a remote for less than Apple can build a little box with a remote? The rest is software which is expensive if you build one box, but progressively drops in cost-per-unit with each unit sold.

Why is that unlikely, especially considering that they are doing that with the current AppleTV?

Then, are you saying it seems likely they will follow the razor blade model, and thus not go for full Apple margins on this product? If so, then the drop to $65 from $74 can easily get washed in the shift from 35% to- say- 25%. Then, let the razor blade approach make up the difference on just software (media) sales & rental through the box over it's lifetime.

I know that Dish doesn't "give" me a "free" HD-DVR because they are happy to take a big loss in margin on the hardware.

But again, who really cares. We'll both find out (hopefully) soon enough. Unless I see some newer rumors soon dismissing the $99 price (or some specs that discount the validity of earlier rumors), I continue to believe that that will be THE price. You are free to believe it will be higher, or require some kind of ongoing hit to the credit card to get it for $99. No big deal.

What's exciting about this rumor is that once again there is something related to a next-gen TV believed to be arriving as soon as September. As a big TV fan (hungry for a little more out of it), THAT would be great... at just about any price $0 to $350+. Or... again... just let the TV UI be the new Front Row, and I probably would just buy a mini for this function.

 

[Master Chief]

I think it will be a similar analogy to the current Apple TV. It currently has an Intel processor, and runs a stripped down and modified version of OS/X, but you can't really call it a Mac out of the box.

The iTV will probably run with an Apple A4 processor, and a modified version of iOS, but its interface will be optimized for a TV screen. It will come with its own App Store, and have gesture support built-in, but I'm guessing that it will just come with an Apple Remote in the box for basic navigation, and gesture control can be activated with the Remote app for iPhone, iPod Touch, and iPad. If it has Bluetooth, then the Magic Trackpad could also be an option.

The reported low price ($99), App support, and integration with other iOS devices could make this a big hit.

Oh yeah. App support would be a great addition [to the Apple TV]. Sure. My wife and children are going to love it. Totally.

For me personally... I don't know – I have yet to play a single game, but it might bring something that I am not expecting, and take me by surprise. If it comes with FaceTime support, somehow, then I am sold. Instantly.

 

[BaldiMac]

Why 16GB of Flash? The first one doesn't have a big flash buffer because it has a hard drive. But this one is supposed to be all streaming. Why do you have to put 16GB in there?

Because I thought 8GB would be a stretch for the current rental model (3-4 GB for an HD movie) combined with reasonable space for the OS, buffering streams, and third party content. You wouldn't even be able to download a second rental until you have watched and deleted/expired the first one.

And I am talking about Flash memory instead of a hard drive, not a flash buffer. Yes, I'm making assumptions, but we don't have anything else to go on.

Why does it have to use an A4? It doesn't have to juggle as much as an iPhone 4, or 3GS, etc to do it's thing. They can do what they did before and use something lessor than "latest & greatest" for what should be a simpler device.

Because that was the original rumor when the $99 price point came out a couple weeks ago.
https://www.macrumors.com/2010/08/11/next-generation-apple-tv-renamed-itv-utilizes-apps-lacks-1080p/

Again, look at a relevant example that also has a case, coprocessor, power supply, inputs, outputs, remote, ethernet, manufacturing, packaging, IP, etc AND is retailing for $89.95. Can Apple not get all those parts & pieces for around the same cost as Western Digital?

Sure, but Apple doesn't want to build the same box as WD.

Does Western Digital have some great advantage over Apple that it can build and package a little box with a remote for less than Apple can build a little box with a remote?

WD's great advantage in hitting a lower price point is that the have lower standards and lower expectations than Apple.

The rest is software which is expensive if you build one box, but progressively drops in cost-per-unit with each unit sold.

But it still has a cost that is accounted for in calculation of margins. And there are additional per unit costs in software (and probably hardware) from patent licensing.

Then, are you saying it seems likely they will follow the razor blade model, and thus not go for full Apple margins on this product? If so, then the drop to $65 from $74 can easily get washed in the shift from 35% to- say- 25%. Then, let the razor blade approach make up the difference on just software (media) sales & rental through the box over it's lifetime.

I said that very clearly several times. Except I believe that the margins will be much lower than that on the initial hardware purchase if it is sold for $99.

I know that Dish doesn't "give" me a "free" HD-DVR because they are happy to take a big loss in margin on the hardware.

They don't give you a free DVR at all. They lease it to you. It remains their property.

But again, who really cares.

Us rumormongers.

We'll both find out (hopefully) soon enough. Unless I see some newer rumors soon dismissing the $99 price (or some specs that discount the validity of earlier rumors), I continue to believe that that will be THE price. You are free to believe it will be higher, or require some kind of ongoing hit to the credit card to get it for $99. No big deal.

What's exciting about this rumor is that once again there is something related to a next-gen TV believed to be arriving as soon as September. As a big TV fan (hungry for a little more out of it), THAT would be great... at just about any price $0 to $350+. Or... again... just let the TV UI be the new Front Row, and I probably would just buy a mini for this function.

Agreed.

 

[HobeSoundDarryl]

Baldimac, since it seems this thread is winding down to just you & me, I'll just offer that my guess is the rental model will shift to off-board storage.

8GB doesn't work if there might be 1080p hardware, as a 1080p film- unless more heavily compressed- probably wouldn't fit in that space. I'm assuming that we are going to get 1080p hardware, even if iTunes Store doesn't get 1080p "software" for some time (and even with the U.S. broadband issues, etc). If so, and if a rental has to be held in onboard flash, then things get messy (I'd wonder if 16GB would be enough, probably not).

My imagination says that with the hard drive moving out, so goes pretty much all local storage. If true, rentals probably get securely stored on the computer or storage that generally feeds the device your own content.

But again, we'll see what comes. I know some rumors still support the "720p is good enough" camp. I hope this won't be 2010 next-gen TV still limited to just Apple's incarnation of "good enough" 720p.

 

[BaldiMac]

Baldimac, since it seems this thread is winding down to just you & me, I'll just offer that my guess is the rental model will shift to off-board storage.

8GB doesn't work if there might be 1080p hardware, as a 1080p film- unless more heavily compressed- probably wouldn't fit in that space. I'm assuming that we are going to get 1080p hardware, even if iTunes Store doesn't get 1080p "software" for some time (and even with the U.S. broadband issues, etc). If so, and if a rental has to be held in onboard flash, then things get messy (I'd wonder if 16GB would be enough, probably not).

My imagination says that with the hard drive moving out, so goes pretty much all local storage. If true, rentals probably get securely stored on the computer or storage that generally feeds the device your own content.

But again, we'll see what comes. I know some rumors still support the "720p is good enough" camp. I hope this won't be 2010 next-gen TV still limited to just Apple's incarnation of "good enough" 720p.

Honest question - Does Apple even support H.264 streaming without local storage? I know Flash can do it, but I've never noticed with Apple software. Apple software can start playing the movie before it has finished downloading, but I'm pretty sure that the whole movie has to be downloaded.

 

[HobeSoundDarryl]

I don't know for sure. I have rented stuff from iTunes that is in h.264 and it will sometimes say I can start playing it with only 1% of it downloaded to the TV. I know for sure it has not finished downloading at that point. So my good guess is yes.

I do envision a stutter (frame) buffer being built in, meaning enough ram/memory to hold several seconds of a file for times when the stream is not perfectly smooth.

However, if your question turns out to be an issue, then we're probably looking at either rentals requiring something to be plugged into the USB port (flash drive? hard drive?) to create the necessary local storage, or else it has to ship with enough to hold at least one big movie (rental download) in full. If I get what I want (1080p playback), then that local storage built in probably needs to be 32GB+, which would blow out my thinking that $99 is possible.

 

[CyberBob859]

Oh yeah. App support would be a great addition [to the Apple TV]. Sure. My wife and children are going to love it. Totally.

For me personally... I don't know – I have yet to play a single game, but it might bring something that I am not expecting, and take me by surprise. If it comes with FaceTime support, somehow, then I am sold. Instantly.

I'm not a big game player myself, but I would go for the MLB at Bat app on a bigger screen. FaceTime would also be a huge draw.