
All of the world's financial analysts and journalists seem to be wetting themselves with excitement at the rumoured release of a new iSlate (or iPad, depending on who you choose to listen to) "tablet PC" from Apple on next Wednesday, the 27th of January (two days after they report quarterly earnings, which should see them come out well ahead of consensus estimates). According to one survey, even consumers are getting (somewhat) interested in it, equal to that of when Apple started selling PCs based on an Intel core architecture.
The Wall Street Journal is also reporting how Apple is trying to find new ways of generating income from traditional media by bringing it to a portable device (for more on that one click here), but to me this is all thinking inside of the box for a number of reasons:
- Steve Jobs has an uncanny knack for surprising the world with new inventions, which are so well integrated in their entire user experience from device through to software and underlying content deals that it can take the world by storm - and, no disrespect meant to the analysts and journalists, the people who are so busy talking up what could be just have no imagination whatsoever...
- When the iPod was released (many moons ago now, it was launched on October 23, 2001 if you can believe it), Apple in one fell swoop were able to succeed in a market where countless others had failed. Sure, MP3 players already existed but they were hampered by a lack of downloadable paid for content as the only online (legal) music services thended to have crap music by hitherto unknown bands. The key to the success of the iPod was two-fold: a. The UI on both the device and in iTunes was so simple you no longer needed to have a degree in astrophysics to operate the device and the computer software, and b. They had the distribution deals in place to secure the content that people actually wanted to listen to - and were willing to pay money for.
- Apple bought lala.com in December 2009 to allow them access to a cloud based streaming platform (for more on the deal, click here) and rumours abound that they've been testing a video streaming service as well.
- Apple already have a hardware box for in-home content streaming, the Apple TV, which is also integrated with iTunes and the deals, which have been made in recent years mean that TV shows and movies are now available for download (both rental and purchase).
- Apple have a strong working relationship with Samsung, who supply everything from screens for computers and mobile devices to the ARM processors which power the iPods and the iPhones.
- A large amount of users have become accustomed to using Apple's User Interfaces (UIs) over the last few years.
- Competition is intense in the PC market, which Apple knows better than most with their ill-fated decision 30 years ago not to license their UI to other manufactures and allowing Windows to prevail as the de facto operating system on both business and personal PCs.

Not just any ordinary television, but one where you would have either a touch screen remote control similar to the iPhone/iPod Touch (or you can use the one you've already got) and/or an on-screen menu similar to the one already known from the aforementioned devices. Furthermore, due to the technologies already mentioned it would allow delivery of premium content via networked streaming as either rentals or purchases, and would also allow the users to access external storage devices (or even an-built one, which would function as both a HDD for TV and as a media library for all downloaded/copied content).
"Why on earth would Apple want to start selling televisions?" you might ask. Here are some compelling reasons, if you haven't already managed to deduce them from the comments above:
- Apple has a strong and loyal brand following, which also allows it to achieve premium pricing, As an article on Clickz.com put it: "Simply put, Apple understands people. It knows that people make emotional decisions, then use intellect to justify those decisions. Dancing shadow people with iPods aren't an intellectual argument for buying an iPod, they're raw emotional appeal." LandorAssociates placed it as the top Breakaway Brand in 2009, in a survey where they culled the data from Young & Rubicam Brands' Brand Asset Valuator.
- Apple already has the online and physical distribution network in place to allow it to make a massive splash - and with a lot higher visibility than "traditional" TV brands, generally sold through 3rd party retailers. But that it only one part of it - it also has the knowledge of how to position and market it as a lifestyle choice!
- Perhaps most importantly, Apple has access to the content that people are willing to pay for! By network-enabling the TVs and allowing them to access NAS devices, computers and linked HDDs and to access the content whether it's local - or downloaded - means that they will achieve something that none of the traditional consumer electronics brands have managed to do, and with an interface that people will actually be able to figure out!
- Apple is not afraid of "breaking the rules" as it has shown time and time again.
- Apple would break away from heavy competition and into an industry, which has been stuck in a rut for years, with little brand loyalty and consumer apathy meaning price is often the only deciding factor for the purchase decision. Apple's strong brand loyalty and great designs would mean that an Apple TV would suddenly be seen as a cheaper option (with a much better design and User Interface) than say B&O, who seem to have lost touch with the marketplace completely in recent years, and whose designs are stuck in a time-warp until they get rid of David Lewis as their primary designer. Apple's TV could even retail at a premium compared with traditional consumer electronics powerhouses Sony and Pioneer, who might not have the requisite skills to compete on brand against Apple, whether or not their products (as "pure" TVs) are superior.
Furthermore, Apple have already paved the way for a foray into a much wider mainstream consumer arena than they have previously managed to. In this respect, perhaps the most interesting analyst's opinion was written in 2006, when Apple launched the Apple TV device, by Bear Stearns' Andy Neff, who wrote the following:
"Ultimately, Apple's goal is to create a product that customers would want (as opposed to creating new technology merely for the sake of technology), while focusing on areas where it can differentiate," he wrote. "Apple noted that it has a number of products currently in development that are likely to be introduced over several years."
Although Apple would not disclose additional specifications of iTV, Neff said the company highlighted that the device fits within its vision of simplifying consumers' use of content.
"Though details remain sketchy, Apple emphasized [the] focus of iTV [is] to improve user experience by leveraging its software expertise and implied that there may be features beyond the mere streaming of video content," the analyst wrote.
Apple has already acknowledged that the device will also be capable of streaming photos, music and podcasts. But during the meeting it also hinted at additional features such as an "internal
At least, I don't think Apple are dumb enough to believe the hype being spouted by some devoted followers, and will know that a lot of work needs to be done going forward whether they venture into the cross-category "be all and end all" portable device or the "old medium" of television.
In other words, even if Apple don't decide to start moving into the home entertainment market right now, the likelihood that they will at a later stage is looking greater by the day. It will be interesting to see what happens over the next 18 months.
As a note to potential investors, it should also be mentioned that no matter what product is showcased on Wednesday, a lot of the stock's expected upward movement in the next few months can be explained by Apple finally showing their hand, and their true financial strength, in the changing of their accounting methods, which will show the revenues for the iPhones instantly - rather than spreading it over 24 months as per the length of the mobile/cellular carrier contract, thereby giving a more realistic view of the company's revenues. For more on that story, head on over to CNet.
(DISCLOSURE: The author owns a limited amount of stock in Apple - 95 shares. This opinion is based on a mixture of analysis, common sense and relationships in companies which may or may not be directly related to Apple. It should not be viewed as a financial analyst's opinion to form the basis for any investment decision - it is purely the view of a marketer working in the field of media.)


