Apple TV: AAPL Likely Launching Living Room Assault at WWDC in June

It seems as though Apple Inc. (NASDAQ:AAPL) has focused so intently on the upcoming Apple Watch launch that it’s left the Apple TV set-top video streamer to twist in the wind. The company’s “billion dollar hobby” has taken a beating from newer and more capable devices like the Google Inc (NASDAQ:GOOG,NASDAQ:GOOGL) Chromecast, Amazon.com, Inc. (NASDAQ:AMZN) Fire TV and streamers from Roku.

Apple TV, new Apple TV at WWDC

Source: Apple

Now, it looks like AAPL is preparing for an all-out assault on the living room.

If reports are correct, Apple’s strategy includes unleashing new, seriously updated Apple TV hardware along with a new App Store and TV streaming options. Apple seldom does anything tentatively and it appears as though the company is carefully aligning the pieces needed to smash the competition and grow the Apple TV into an even bigger business.

In the meantime, the company is trying to boost Apple TV sales by slashing the price from $99 to $69, but that is clearly a stopgap measure.

HBO NOW

The first component of Apple’s attack actually dropped at the Spring Forward Apple Watch event. The company announced that Time Warner Inc’s (NYSE:TWX) HBO NOW would premier exclusively on Apple devices, including the Apple TV. This allows AAPL customers to watch HBO’s entire video library as a standalone service for $14.99/month –no cable subscription required.

TV Bundle

There have been rumors for several years now that AAPL has been in negotiations to offer TV streaming through the Apple TV that would replace cable altogether. Comcast Corporation (NASDAQ:CMCSA) had been central to many of these, but any relationship between the cable provider and Apple appears to have stumbled.

That said, The Wall Street Journal reports that Apple may be nearing an agreement with broadcasters to offer a slim, subscription streaming TV service with 25 channels. The Apple TV would be the living room point-of-access for the service, which would also be available on other Apple devices such as the iPhone and iPad.

The timeframe for the service is pegged as a September launch, with the official announcement in June.

New Apple TV and App Store

The web is rife with speculation that Apple is finally releasing new Apple TV hardware in June.

The story, which originally appeared in Buzzfeed News, has AAPL announcing a seriously upgraded Apple TV at its June World Wide Developer’s Conference. According to Buzzfeed’s sources, the new Apple TV would be powered by the powerful, 64-bit A8 processor that currently runs the iPhone 6 and iPhone 6 Plus — the current Apple TV uses the 32-bit A5 CPU that dates back to the iPhone 4S. It would also see a “dramatic” increase in onboard storage.

The new Apple TV would feature Siri integration for voice control and its own App Store (thus the need for greater storage capacity and such a powerful processor). These upgrades would propel the Apple TV from being just a set-top streamer, to a being able to run its own apps and take on competitors like the Fire TV that can play Android games on a TV.

A further hint from Apple itself that new hardware is coming can be found on the Apple TV ordering page, where the price (for the single device) now reads “starting at.” You rarely see a “starting” price when there’s only one product and no options, as is the case with the Apple TV today.

Too Late?

There’s no denying the Apple TV has been hurt by Apple’s indifference, especially in the past year.

Initially dismissed as a hobby when first released in 2007, it quietly turned into a billion-dollar business by 2013. However, AAPL has neglected to update the hardware since then and in 2014 the competition aggressively went after the Apple TV with cheaper, more powerful streaming hardware. In the course of a year these new streamers knocked the Apple TV from a 25% market share to 17%, rolling back years of gains.

Google’s Chromecast went from zero to 20% during that timeframe. Counterintuitively, that rapid growth holds hope for Apple. If it can show off compelling new hardware — especially an Apple TV that takes advantage of its massive library of polished games — and also offer a subscription TV service that appeals to cord cutters, the new Apple TV could not only regain its lost market share, it could take AAPL to new heights in the battle for the living room.

So mark early June (last year’s WWDC started on June 2) on your calendar. With HBO NOW, the likelihood of new hardware, and strong signals of a TV bundle and app store, the stars appear to be aligning for AAPL to turn its attention to the long-neglected Apple TV. Finally.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2015/03/apple-tv-aapl-wwdc/.

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