Two months, two Apple (AAPL) events. Now we know all about the new iPhones, iPads and iMacs. We know the Apple Watch will be coming in 2015. But what about the living room? Where the heck is the new Apple TV?
There was a time when AAPL could be cavalier about its set-top streaming box. But those days are gone now that the one-time “hobby” is its fourth-largest line of business. In February, the company announced it sold more than $1 billion worth of Apple TVs in 2013 — close to 10 million of them.
But the $99 Apple TV has not had a significant upgrade since the third generation of the device was released in March 2012, over two years ago.
There have been a few minor tweaks in that time. Multiple software updates have continued to add channels and there was a slight CPU bump in January 2013. As reported by Forbes, Apple quietly slipped in HomeKit support as part of the iOS 8 rollout, making the Apple TV a central hub whenever APPL flips the switch on its connected home plans.
Apple TV: Barbarians at the Gates
Adding functionality via software updates is great for current Apple TV owners, but it’s not enough to keep the existing Apple TV competitive. Consider everything that’s happened in the space in just the past year alone.
In April, Amazon (AMZN) released the Fire TV, a set-top streamer with far superior technical specs, a voice-search remote and the ability to play games from Amazon’s app store on the TV. The company also released a controller, making the Fire TV a true low-priced video game console alternative.
Google (GOOG) just followed suit with its Nexus Player, also offering voice search, the ability to play Android games on your TV (including free multi-player online gaming) and an optional game controller.
Then there’s Roku — a long-time Apple TV competitor — which revamped its lineup for 2014 to include the $99 Roku 3 streamer with game support and a motion control remote.
Sony (SNE) is getting in on the game too, with the $99 PlayStation TV, a tiny set-top box that plays older Sony console and mobile games and lets you broadcast PS4 games from the big console to any TV in the house. The PlayStation TV also streams video from the PlayStation Store with plans to add more video content sources via apps.
In short, as it stands today, Apple is going into the crucial holiday season seriously behind the competition.
In the Apple TV, it has two-year-old hardware facing off against direct competition from some of the biggest consumer electronics companies outside of Apple itself. Amazon claims its box has three times the processing power of the Apple TV. While all of the set-top boxes are priced at $99, the Apple TV is alone in its inability to play video games and most of the others also offer advanced voice search options. Yikes.
Apple Has the Pieces for a Killer New Apple TV
The Apple TV doesn’t need to be outgunned. It could easily be kicking the newcomers to the curb before they establish a foothold.
Apple has had game controller support in iOS for over a year. When it comes to high quality mobile video games — the kind that can actually compete graphically with consoles — Apple has a clear advantage. When Electronic Arts (EA) and other major publishers release new titles, they usually hit the Apple Store first.
When it comes to compact CPUs that can push pixels, the A8X chip found in the new iPad Air 2 is a powerhouse that already supports iOS. And it may not be perfect, but if Siri — the iOS voice assistant — can drive CarPlay, surely it can serve as the voice command system for a new Apple TV.
So if Apple has all the pieces, where is the new Apple TV?
Your guess is as good as mine. I was expecting it to be a surprise announcement at the most recent Apple event, but obviously that didn’t happen. Maybe it got lost in the push to get the bigger iPhone 6 to market. Maybe resources got pulled to rush the Apple Watch out the door.
What I do know is that Apple can’t be happy about its prospects going into the holidays with a set-top streamer that’s clearly over-priced, under-powered, and seriously lacking in features compared to its competition.
If I were a betting man, I’d look for AAPL to do something — either a surprise release of new hardware or a serious discount — in the next month. The company needs to act to keep the Apple TV on top and prevent the Fire TV, Nexus Player, and others from kicking it back down to hobby status.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
