My first instinct was to declare that Apple would never make a full-fledged television set. It would be a huge flop. I would personally never buy one, and neither would anyone I know. If Apple made a television, it would be a huge overreach for the company. Most of all, I have an instinctual belief that Steve Jobs hates television, and that he wants the throng of Apple buyers to be up and moving around, not placid on the couch.
That's the thing about prognosticating Apple's next releases. The safe money is always on "no." Apple underwhelms. When Apple does surprise, it's not: "Surprise, we've decided to use Blu-Ray on our new laptop!" or "Surprise, we're making a 3D iMac!" It's more subtle than that, and Apple rarely changes a game with surprises. Apple changes a game with a slow, steady build to perfection.
If there is a game that needs changing, it's television. Television is a mess. The video entertainment world is a free-for-all battle for the precious minutes viewers will spend sitting and watching. Clearly there is a market for devices outside the capabilities of the normal television. Most device makers are turning to the Internet for answers, and finding confusion instead.
You can buy a Samsung TV with Internet connectivity and apps. Blu-ray players are incomplete these days without Netflix support or some other Internet on offer. Google has a set-top box operating system on the way, and TiVo's refresh also leans heavily on Web content. Personally, I don't think the Web is the solution to television's market problem, but clearly the manufacturers are looking for answers, and they've stumbled upon two. Either it's going to be 3D or it's going to be connected. Preferably both.
This is the type of market in which Apple excels. An established market that has lost its way. Personal computers were established, but nobody knew how to put one in every house. Portable media players were established for decades before the iPod, but nobody knew what to do with the new digital technology. Smartphones and PDAs were established, but nobody understood the importance of interface design. Netbooks were running rampant, but the form factor and operating system were all wrong for the price point and the audience. In each of these cases, Apple did not invent the category, but they did see a weakness in the existing product lines.
There is a similar weakness in TVs today. Prices are dropping, picture quality is skyrocketing, but manufacturers are having a hard time getting new and interesting content in front of viewers. This is not a new market. Most people buying a quality HDTV today are not buying their first flat screen; they are probably buying their third or fourth. But most of them have never owned a set-top box not provided by their cable company.
This is where Apple can strike. Forget the box itself, it was always a bad idea. Instead, integrate all of the features into the TV itself. There are plenty of companies already making such TVs, but most of these rely on some version of Windows to function, and the rest use a proprietary or confusing standard that is not interoperable with the rest of the equipment buyers have lying around. I've been reading about DLNA for years, but it hasn't been widely adopted enough or simplified to the point where every living room is DLNA capable.
There is little brand loyalty in the television market right now, probably because price points and technologies are so far apart. For my living room, I needed a larger set, so I bought a Panasonic plasma. For my office and game room, I need something smaller, but high quality, so I go with a Samsung LCD. For the bedroom, I rarely watch TV in bed, so I get a Sharp LCD on clearance from Overstock. All these TVs look great. Side-by-side, I could hardly tell apart the Panasonic plasma and the Samsung LCD.
In other words, Apple would instantly become a recognizable brand with plenty of cachet in the TV market. I buy a TV based on size, cost, quality and features, in that order. But that's the wrong way to buy a TV. Ideally, I'd think about quality first. If there were compelling features that were actually important to me, I might consider a set based on features, but right now I just want to watch TV and play some games. One way Apple excels is showing customers that certain facets of a product are much more important than they originally thought.
I've never purchased a TV based on its hardware design, but I've never been so enamored with a TV design that I had to have it (and could afford it). I've never purchased a TV based on its other features because I didn't care about the features I was offered. But what if Apple brought something new to the TV world?
What about video chat? Apple already makes a 27-inch television with a video camera on top. They call it an iMac. You can mount it on your wall and control it by wireless remote. Now, Apple also makes a phone with a front-facing camera. Soon, rumors suggest Apple could launch an iPod touch and an iPad with the same features.
I had a nice video chat recently with my mother, who was visiting, and my sister, who lives in Amsterdam. At my house, we sat down on the couch and placed a laptop on my coffee table for the chat session. Eight feet in front of us, my television set loomed. Imagine if that TV had a video chat camera on top? It could be like a consumer version of Cisco's Telepresence service. I also think it could be just the beginning.
Microsoft is using cameras near a television for motion gaming. The Kinect device for Xbox 360 will also come to PCs. It will allow for more than just games, though. Soon you'll see motion gestures to control television and computer features. This sort of feature would be perfect for an Apple TV.
The possibilities are endless, and most of them are already based on existing concepts. This is exactly how Apple likes to play the game. Take an existing idea and make it much better.
The biggest outstanding problem I can see is price. I might pay more for an Apple TV, but not much more. If I'm in the market to spend $1,500 on a television, I might spend $2,000 on an Apple TV, but not $3,000. This for something in the low 40-inch range, at least.
There are a couple things I will say about Apple pricing, though. Apple's prices seem very expensive up front, but months later seem entirely worth the additional cash. Once you've gotten used to your Apple product, the idea of paying less for something that is far inferior is unappealing. This is the nature of luxury, and it isn't exclusive to Apple.
The other this I'll say is that Apple has the ability to surprise us with pricing. You can buy an iPhone 3GS right now for $100 on contract. I can think of a dozen other phones in that price range that don't come close to matching the 3GS in terms of quality and user experience. A base iPad costs about the same as a very good netbook, but again I'd argue that the experience for iPad owners is beyond compare. In fact, aside from Apple's MacBook Pro line, and their exorbitant prices for extra RAM and accessories, Apple's pricing is fairly reasonable, and within the boundaries of the market.
An Apple HDTV is inevitable. The company practically makes an HDTV already in the flat screen iMac desktop machines. The television market is floundering. Companies are grabbing at ideas as they float by, trying to find a compelling feature or strategy to convince buyers that TVs are more than simple screens for plugging in your cable. This is where Apple excels, in finding a market that has lost its way and beating it into submission. We won't kneel before the Apple HDTV, but we might sit back on our couches and enjoy the show.