Daily Management Review

Apple Inc. to Revamp Apple TV, Aims to Gain Toehold into User Residences


Apple Inc. to Revamp Apple TV, Aims to Gain Toehold into User Residences
Apple Inc. is expected to unveil an upgraded Apple TV, a device similar to a set-top box that brings video and music from the Internet to a television, said media reports.

Experts say that this unveiling, which is expected to happen next Wednesday at an event in San Francisco, is an effort by biggest brand of the world to push into the living rooms.

Apple is upgrading its Apple TV for the first time in three years. It was launched in 2007. The upgrade would expand Apple TV’s uses in gaming and would include a redesigned remote control with  a touch pad that can double as a game controller, reported the New York Times. The upgraded version of the Apple TV would also have support for apps and games made by independent software developers. 

Apple had not seemed to be serious about the monetary gains to be got from Apple TV, which accounts for less than 5 percent of sales and had termed the service as a “hobby”. However this time, Apple TV would share the spotlight with Apple’s biggest moneymaker, the iPhone and hence it is expected that the company is now placing more importance on the monetization of the product.

Though Sony had rolled out its PlayStation game console, Microsoft the Xbox console and Amazon introduced home devices like the Amazon Echo, the residences has been a relatively hard market to invade as far as the IT companies are concerned. This revamping of Apple TV would put Apple Inc. right into the middle of the battle among the IT companies to get a toe hold into the users’ residences.

 “The most important thing about the Apple TV announcement is it becomes a broader utility box. Then it can ultimately become the Trojan horse for all kinds of services in the home that, in turn, let Apple sell more hardware,” said Peter Csathy, the chief executive of the media consulting firm Manatt Digital Media.

Apple Inc. whose major revenues and profits come from the iPhone, has been diversifying and looking to generate revenues from other sources for a few years now. The company, under Timothy D. Cook, Apple’s chief executive, has broadened product lines into wearables with the Apple Watch and new services such as Apple Pay and Aple Music. This allows the company to get more customers into its ecosystem of products, software and services.

In 2013, the hiring of a Hulu executive, Pete Distad, who oversaw content distribution and subscription initiatives at Hulu, to work on Apple TV, indicated that the company had more serious television ambitions.

This is evident from the revamping of the Apple TV business plans of the company. The product’s appeal would be broadened by the Apple TV now supporting apps and games made by third-party software developers as well as the redesigned remote control, and make it more of a competitor to the Xbox, the PlayStation and the Nintendo Wii U.

 “More interesting than content deals is what happens in the app store. Now that Apple TV is a software development platform, developers can now write for a 40-inch screen. That will immediately bring more interesting content and apps to the device, which is at this point more compelling than trying to cut a bunch of content deals,” said Ben Bajarin, an analyst at Creative Strategies

However the upgradation is also coming with an increased cost with the product being reportedly priced at $149, $80 up from the earlier price of $69.