Apple TV: A lost opportunity?

When you were a child, did you ever annoy your parents into buying you a toy for Christmas or Hanukkah, only to find that once you unwrapped it and took it out of its box, it wasn't exactly what you were expecting? I felt that way after Steve Jobs' introduction today of Apple TV Part Deux. For months, there were rumors flying around about what the new Apple TV would be able to do. Jobs himself specified the problems with the old Apple TV approach in an interview with Kara Swisher and Walt Mossberg at the D8 conference last June:

"The problem with innovation in the TV industry is the go to market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us... ask Google in a few months. So all you can do is ADD a box to the TV. You just end up with a table full of remotes, a cluster of boxes... and that's what we have today. The only way that's going to change is if you tear up the set top box, give it a new UI, and get it in front of consumers in a way they're going to want it. The TV is going to lose in our eyes until there is a better go to market strategy... otherwise you're just making another TiVo."

The new Apple TV doesn't solve any of these problems. It's not a replacement for any existing set-top boxes, especially the ones from cable, satellite and IPTV operators, because the only content providers that have signed on are Disney/ABC and Fox. So, to use Apple TV, you're adding a set-top box and remote. Jobs said that the solution was to "...tear up the set-top box (and) give it a new UI...", but Apple TV is simply a smaller version of the original Apple TV, with a slightly improved UI. In short, it doesn't do what Jobs correctly said had to be done in order to change the game.

Further, Apple TV is closed. It apparently doesn't use iOS, it doesn't allow developers to create apps that extend its functionality, and it doesn't have a web interface or other means to access content on the open Internet. Many people, myself included, were hoping that the new Apple TV would be iOS-based and would run iOS apps. Apple may have decided that the living room TV would stretch the iOS user interface so much that it wouldn't make sense to try to run phone- and tablet-based applications. They may have also believed, as Jobs said today, that consumers don't want to deal with a computer when they want to watch television. However, they still could have opened up Apple TV to content from third-parties. With the exception of Netflix, YouTube and Flickr, Apple TV is a walled garden and other content providers need not apply.

The only real improvement that Apple TV brings to the table is price. The box and the content are less expensive than in the first version. However, much of that same content is available for free from other sources, and other solutions provide far more content overall.

At the end of the day, I don't know why Apple and Jobs bothered to release this iteration of Apple TV. It doesn't do what Jobs himself said that it had to do in order to be viable, it doesn't have a critical mass of content partners, and it provides only small incremental improvements over the product it replaced.

Apple's opened a hole wide enough for Google TV to drive a truck through...if Google has the talent to take advantage of it.