Apple's next big bet: A TV box that monetizes the living room?

Apple's next big bet: A TV box that monetizes the living room?

Summary: Apple TV may hold a tiny fraction of overall quarterly sales, but adding an app store directly in a user's living room could mean a significant profit boost for the iPhone and iPad maker.

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TOPICS: Apple, iOS
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(Image: CNET)

In the latest round of rumors, reports emerged on Thursday that Apple will revamp its television set-top box in the first half of 2014.

But there's a twist: The Apple TV device may soon include an app and game store, akin to that of its sibling products in the iOS-powered device range.

As first reported by 9to5Mac's Mark Gurman, citing sources familiar with the matter, the device will include a revamped operating system — currently, it's based on the same software used on the iPhone and iPad — that will fling open the doors to the amount of overall available content.

The news, if true, may represent a turnaround on what senior Apple executives had felt about the living room-based platform. It would be a continued logical evolution over many iterations of the device.

Apple (as you might expect) declined to comment to sister-site CNET on the news.

By simply opening up the door to another point of purchase directly in the living room, Apple's revenues could see a significant spike in the following fiscal quarters.

During Apple's fiscal fourth-quarter earnings, the company generated $4.3 billion in iTunes Store and App Store revenue, up 22 percent on the same quarter a year earlier. The number isn't broken down more granularly, but most of this figure comes from music, video, and app downloads. While Apple TV can be used to purchase music and video content outside a desktop version of iTunes, the technology giant could be aiming to expand its revenue reach by giving another device the ability to buy apps.

"Our Apple TV product is doing quite well, but in the scheme of things, we still classify Apple TV as a hobby. We continue to add things to it. I don't know about you, but I can't live without it." — Tim Cook, 2012

Chief executive Tim Cook dubbed Apple TV as a "hobby" for the company. Raking in about 2 million sales during the fiscal first quarter of 2013, with an expected year-later figure of about the same, the set-top box has one thing that most other devices Apple sells don't have: Potential.

It has been and remains, at least in Cook's eyes, an "area of intense interest" for the company.

Any developments in Apple TV could be a stepping stone for bigger and better things for the set-top box — which many still consider a test-bed project ahead of a fully-fledged television set. 

The battle for the living room is beginning to take shape. Apple, however, has not made any plans clear for a highly anticipated television set, if ever. Nor has the company given any clear indication of which direction it will take its set-top box business in.

The technology giant started out with its own set-top box, gauged the market, and held back where appropriate and necessary. Not wanting to rush a decision on building a low-volume yet high-margin television, the company has over time dedicated a small amount of overall resources to a cause it believes in — yet doesn't know where the industry is taking it.

If this latest leak is to be believed — make no mistake, Gurman's sources have near-impeccable accuracy — there are no plans to dish out a fully fledged television set for some time yet.

But as Apple TV remains a side project, despite significant resources being plowed into the set-top box, it's indicative of a wider problem for Apple: It hasn't yet fully conquered the living room space.

Apple still has yet to receive any incentive to jump into the television-building business. Televisions cost a lot to build and develop, and owners replace them every five years or more; unlike smaller devices like smartphones and tablets that are replaced almost every year.

But if the time is ever right, that may be when we see an Apple television.

Until then, it's no skin off its nose. It was fun while it lasted, and there's no love lost if it doesn't ever make it to the "big screen."

Topics: Apple, iOS

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63 comments
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  • The new model

    requires a credit card just to turn it on. Features the ability to purchase songs and movies at full price. Also lots of fart apps and useless games for purchase as well. Anyone who buys this unit over better alternatives needs to see a physiologist.
    Sean Foley
    • Thanks for your contribution

      You've really laid out a cogent and intelligent argument there, you pointless idiot.
      Englishmole
      • Your Welcome

        No problem Englishmole. Happy to help you. BTW - great screen name. Are you really a mole or just look like one?
        Sean Foley
        • Really Sean?

          That's your response?



          At least grammar check it before submitting.
          Englishmole
          • Englishmole is just an eater

            of Apple's CEO's iTurds. He loves them and his head is full of them
            markbn
        • The usual junk from Sean

          Too bad you are so frightened by Apple. I see it everywhere you post.
          melgross
      • Ya, well its the most ridiculous money grab Ive ever heard

        Not buying it, will never buy it and would always advise people not to buy it.

        Just Apple putting a money grabbing machine in your living room. A toy for the rich who have so much money they are trying to find new ways to spend it.

        Ridiculous.
        Cayble
        • Apple doesn't care about you.

          They want Microsoft customers on their side, not Microsoft shills.
          DontUseMicrosoftAtAll
        • So, $400 for the PS4, and $500 for the XBox One isn't a money grab, where as this costs just $99? Seriously? Your arithmetic needs some polishing.
          melgross
    • Human physiology

      Or fruit physiology?
      MarknWill
      • Or, alternatively

        Young Sean needs to learn that a physiologist isn't the person he thinks it is.
        Englishmole
        • Another Example of of the waning innovation at Apple

          Other than weight and dimensions, the iPad is stuck in a time-warp right along with the faded and boring iPhone.

          These days, Apple seems content to keep re-living its glory-days with the same tiresome devices and user-interfaces.

          So... what's a company do when they stop innovating? Why, just introduce something that everyone can already have by connecting their laptop to their flat panel TV.
          ribzilla
          • Exactly. This is a machine for the bored and rich.

            Apple is counting on the hope that many of the unsavvy will never have thought of simply hooking their laptop to their television. And the funny thing is there are some that are so unbeleivably clueless they wont even realize they could do everything and more that this peice of junk can do if they own a computer.

            This is a real cheezy bit of tech that Apples hoping their reputation as a maker of brilliant new magic machines will make the "IT clueless" think its something new.
            Cayble
          • Hooking the laptop to the TV may work...

            If you have a laptop. And if you want your laptop to be unusable for other things anytime someone wants to watch TV. AND if you don't want to use your laptop while YOU'RE watching TV (crazy, I know, but ever hear of 2nd screen). And if you don't want to have a latop-TV-household members of 1:1:1. And if you want your living room to look like some 27 year old geek's basement apartment in his parents' house.

            Hell, why bother with a laptop, why don't you just put your custom built PC rig on the floor under your TV in your living room (with the case off, for an added touch) and decorate the rest of the room with all the spare PC components and cables that you've been hoarding for the last 10 years?
            TroyMcClure
    • Alternatives

      Agreed, except: What better alternatives? XBox with XBox live is incredibly expensive (and power hungry) if all you need is a media hub. PS4 isn't cheap either.

      Make this a 200$ box that costs 100$ to manufacture and runs casual games. This could become the next Wii, and stay relevant twice as long.
      Sacr
      • Wii already has this

        You could pick up a Wii for $120 that will do everything this mythical Apple box will do. You guys forget the wii store has lots of games in it ready to download for cheap. You can buy an app from the wii store that uses a real controller. Apple would need to come up with a controller of some kind because dvd style remotes are not very usable.
        zmudd
        • Wii is past it's prime

          The Wii does not do 1080p. It doesn't even doesn't even do 720p. A Bluetooth controller wouldn't be hard to make.
          Wierdninja
          • Wii Resolution

            The original Wii, with the Game Cube ports most certainly does 720p natively with component cables. Even with the composite (Red / White / Yellow) the higher resolution options are visible, albeit grayed out. Still no 1080p but 720 for sure.
            ct2193@...
      • Practically everything is better. EVERYTHING!!!!!

        Unless you dont already own anything tech related, like no computer, no laptop, no modern gaming console...just a TV.

        And if the first bit of IT tech your going to invest in is an Apple TV box, well, all the best to you, why not consider entering the modern world.

        This is the most blatant money machine Ive ever heard of. You might as well start letting the casinos sell Chromebooks to plug in your TV and have them specially rigged to gamble for cash online and call them iCasino, except Apple would no doubt sue for the "i" portion of the name.

        I can understand equipment that goes online and does all the things a computer should be able to do, including download movies and music etc. from any source, but making a machine that is purposely designed to take you to their online business and start buying is just too much. Particularly when a huge portion of the population has equipment that will do that and more already, with the only flaw for Apple of course being that it allows for too much online competition. No doubt Apple TV was someones idea to cut out as much consumer choice as possible.
        Cayble
        • What the hell are you ranting about??

          That was the most incoherent rant I have read in a long time. Are you such a dumb anti-Apple fanboy that you can't even come up with a rant that actually make sense?

          You need some serious professional help.
          wackoae