What’s Apple’s next big major product?

Perhaps the biggest concern Apple aficionados have about Steve Jobs’s departure from Apple isn’t that Apple will suddenly fall apart, but that there won’t be any breakthrough new products like Mac, iPod, iPhone, or iPad.  It’s a fear of mine as well, but I think the next area Apple’s going to revolutionize is the living room through Apple TV.

Apple’s had the Apple TV and despite anemic sales they’ve kept it around as a “hobby” of sorts in terms of their sales performance expectations. Apple knows there’s something there, but they haven’t quite put enough into it to really hit it hard.  However, if you look at the markets Apple has gone into in the past, this one is a really perfect logical next step for them.

Let’s look at the four major product lines Apple has made that revolutionized computers.  You could even say there are five. They are the personal computer (Apple //), the reinvention of the personal computer (the Mac), the MP3 player with iPod, cell phones with iPhone, and then the tablet world and even perhaps another reinvention of personal computers with iPad.  Let’s look at each of these product categories and see if we can find a pattern:

Before personal computers, you bought computers in kits and had to assemble them yourself at the component level. Some had no monitors at all and instead had some blinking lights. You often had to make the case for the computer yourself.  It was a major geek tool.  Apple came along and changed the computer into a product you could use right out of the box, complete with monitor and keyboard. Very little assembly was needed.

As these computers grew in popularity, they still remained something that not every household had. After all, there was quite a bit of a learning curve associated with using a computer, and interacting with a computer by using keyboard commands isn’t everybody’s cup of tea. Apple sought to solve this first with the Lisa, but then tried again with Macintosh, an all-in-one computer that featured a graphical user interface that you interacted with using a mouse. This was a ground up rethinking of how the computer worked, even though it a lot of the components appeared similar.

Then, for a really long time, no game changing products came from Apple. Sure, there were clever things like Newton coming out (and let’s not forget about Pippin!), but half-baked implementations left them doomed. Steve Jobs was gone, and though that didn’t necessarily mean Apple had to be doomed, the leadership that replaced him were incapable of making great products.

But after Jobs returned, we soon after saw a new market arrive.  MP3 players were around at the time, but they all either had pathetic capacities (like 32 megs, enough to hold maybe 10 songs if you’re lucky) or if they were hard drive based players, they were bulky, because they had a 2.5″ hard drive in them. And using them was a pain. They had USB connections to the computer, and it took a really long time to copy tunes to them. And the UI wasn’t that friendly. It was analogous to a CD player’s UI.  Then, iPod came along. iPod solved all of these issues. It had a huge hard drive (5 gigs was insane at the time), a great 10 hour battery life, and it was the size of a deck of cards. And it had a great UI, and it was easy to browse through a large library of music. Copying music to it was easy, too. You just plugged in the FireWire cable and you copied a song or two per second.

Cell phone use was growing in the mid-2000s, but as they were trying to get more sophisticated, they sucked at it.  Cell phone data plans charged by the kilobyte and were extremely expensive.  Using the internet on one of these things was an exercise in futility. You often had to view things with a crippled browser with no JavaScript or any rendering resembling anything like the web page. The phone was riddled with buttons everywhere, and navigating through the UI of the phone itself was painful. Then, after long awaited rumors and endless mockups by users, Apple does come out with a phone. It’s simple and elegant, having only two exterior buttons (plus volume control and a silencer). The screen is large and all touch based.  It’s an order of magnitude easier to use than any other smartphone that’s ever existed. And smartphones have never looked the same since then.

Fast forward a couple of years, and you’ll see that there is a growing murmur that Apple is hard at work on a tablet computer. People seem to love the concept of tablets, but none of the ones on the market are particularly good. They are all running essentially the same desktop Windows OS which isn’t well optimized for a tablet, or it’s using a proprietary tablet OS that doesn’t have many apps available for it (see: Archos).  Apple releases iPad, an elegant tablet that runs the well established iOS, is very thin and relatively light, and thanks to Apple’s now sizable clout in the supply chain, has a price $300 lower than what pundits expected. Competitors are struggling to make a competing device that matches iPad’s price, let alone beats it.  iPad has a level of simplicity that desktop computers have never managed to achieve because iPad throws most of the conventional desktop UI patterns and metaphors out the window.

Picking up on a theme here? Apple looks at existing devices or classes of devices whose user experience is poor, and it simplifies them. A lot of anti-Apple pundits brush this effort off, as if redesigning phone UIs is nothing more than putting a paint job on something. If making the product Apple-caliber were as simple as these people say it is, then every other company would be doing it too.

But picking up on this theme and following Apple’s very public statements every quarter that Apple TV is a project that they see something in, I think Apple’s moving into the living room next with a reinvented TV experience. I might be going out on a limb here, but I think it might actually be a full blown TV.

TVs are a race to the bottom right now. They’re very much a commodity, and they’re made by various Japanese companies that pile on meaningless features and numbers onto the TV’s box hoping that it will make consumers feel like they’re getting great value. The TV’s remote control manages to have dozens of buttons, despite the fact that people only use a few of them anyway and don’t know what most of them mean (even technical minded folk like me are included in this).  The TV has an array of ports on the back that most don’t understand, and each TV is a little different to use from other TVs. When you go to someone’s house and they have their own TV/home theater setup and you want to watch something, you have to ask your host exactly what the hell you need to do to get the TV working. Though setting a TV up is usually straightforward, it sure isn’t friendly, and companies like Best Buy have been eagerly capitalizing on it by charging hundreds to send a minimum wage worker to your house to set it up. Profit margins on TVs are laughably low, and even though the TVs have a seemingly huge amount of functionality on them (as evidenced by their myriad remote control buttons) we usually derive all of our functionality from the devices we connect to them. These are the set top boxes. Nobody likes them, yet everybody has several. And inevitably, each set top box has its own overly complicated remote control.

It’s a fucking nightmare.

I think Apple’s next product is going to be a TV that eliminates all of this complexity in a major way. The new Apple TV will not be riddled with a ton of ports on the back. In fact, it might not have any at all. Maybe a way to connect speakers, and maybe a USB port or Thunderbolt port just in case.  The remote control will be simple. It might even be a simplified handheld iOS device with the Remote app.  Or maybe it won’t come with one at all, because you’ll be expected to use your own iOS device to control the TV. There will be no DVD player. No cable set-top box. No TiVo.

Instead, it will get all of its content from the internet. With iCloud you’ll be able to access and listen to all of your music and TV shows and movies. It will be powered by iOS and there will be an SDK so that developers  and content providers will be able to make their own apps that are sort of like channels. You will be able to subscribe to these on a per-network basis, or maybe even a per-show basis, and pay smaller subscription fees for just what you use. Netflix will be there, MLB will be there, NBA will be there, perhaps some other sports channels will be on there.

iOS has grown into an incredible gaming platform, and this will happen around Apple TV as well. I think selling Bluetooth game controllers a la Wii would be a bit too conventional. Perhaps iPhones will be the controllers for those games. Don’t get me wrong, I’d love a controller with some buttons so I could play some platform games with a lot of fun, but it’s not very Apple-like.  These probably won’t be games for the hardcore gamer, but they’re going to be really great casual games for the families with children and people like me who don’t have much patience to spend hours gaming.

People will lose their shit at the thought that Apple has the audacity to make a TV that doesn’t have the expandability of being able to add extra set-top boxes. There may even be some fear of planned obsolescence given that iOS sees a regular release cycle and people expect their TVs to last a decade or so. People will complain that Apple is killing the DVD too early. People will complain that Apple is doing this to hold back customers from having the control to add things to their TV. Really, this is just a simplification of something that is way too complicated. We’re ready for DVDs to die, and we’re ready to see the TV become smart.

Alternatively, I could see a universe in which Apple doesn’t quite go so far as to sell the TV itself (it is admittedly a race to the bottom) but I can see them revamping the Apple TV set top box to do all of these things.  That would be less bold for sure (and I’d be stuck having that monstrous TV remote around just to turn the TV on and off) but it would be a crowd pleaser. Still, it isn’t characteristic of Apple to take that road.

I am confident that things are about to happen to Apple TV, and the potential market for it is huge. I’m pretty excited to see what Apple comes up with.

3 responses to “What’s Apple’s next big major product?”

  1. Mike says:

    A very compelling read, and I hope you’re right. If they go this route, the one challenge that I hope Apple can solve is the availability of live content, notably sports. MLB.tv would be a great service, but it’s completely worthless to me because in-market games are blacked out. They don’t want me to get rid of my cable subscription. And, well, I haven’t.

    Maybe this means teaming up with the big cable companies so I can get access to the content on my new Apple TV (streaming from Apple, but sublicensed from the cable companies). Maybe it means some technical solution a la CableCard (but that, you know, actually works). I’m not hooked on the technology, but I am hooked on the content. A TV that doesn’t play live sports is a TV I wouldn’t buy.

  2. Aaron says:

    Mike, you’re aware that Apple TV currently does do live games with MLB, right? There are blackout restrictions for local games, but I presume those are the same restrictions you get with cable, except with this you could be sneaky and use a proxy if you wanted (maybe, or maybe it’s tied to a billing address, which you could also work around).

  3. Mike says:

    Yeah, I’m aware. The MLB blackout policy is pretty obscene, though. I’m considered in-market for four different teams: Both Chicago clubs, Milwaukee and St. Louis. (Live in Decorah? Add Minnesota and Kansas City to those four.) So any games carried by a local station are not available on MLB.tv. In other words, with very few exceptions, I couldn’t see any of the games that those teams played. And it gets better: I couldn’t even pay for the St. Louis and Milwaukee stations if I wanted to. They’re not available on cable in my area. But the games are still blacked out on MLB.tv. Any national game on ESPN? Blacked on out MLB.tv.

    The service is seriously only good if you’re a fan of a team, but don’t live in their home market. It can’t be used as a replacement for cable.

    The policy states that “MLB.com live game blackouts are determined in part by IP address,” so I imagine it’s a combination of billing address and IP address. Either way, it’s a mess that needs to be resolved.

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