At Apple’s earnings call earlier today, COO Tim Cook reiterated the second class citizenry of AppleTV. As paraphrased by Macworld:
Apple TV market isn’t that large, so that’s why we classify it as a hobby, so nobody gets the wrong impression that it’s anywhere close to the other markets. A number of us use the product, love the product, so we’ll invest in it.
In my mind, there are three developments that individually or collectively could thrust ATV into the spotlight.
First and foremost, Apple TV cannot be a primary television device as long as we receive the majority of our television programming through mostly locked down cable and satellite providers. CableCARDs, in their current form, stifle innovation and competition. But the FCC is pushing for some sort of home television gateway prior to 2013. That could dramatically change the landscape. Then again, by 2013 we may all be watching Hulu online from our iPads. Leading to point number 2…
Apple’s got a proven app store business model. As soon as they migrate it to the Apple TV, they’ll simultaneously stimulate development and sales. And, of course, they’ll take their cut of app revenue. We’ve already got a number of decent video-centric iPhone apps that could work well in a lean-back environment, such as Showtime, Slingbox, and Netflix. However, significant work would need to be done to support the various resolutions, aspect ratios, and entirely different form of (remote) interaction.
Lastly, if Apple’s unfortunately named iAd platform proves successful in the mobile space, it’s not inconceivable to envision them pumping an ad-infused ATV (in conjunction with the enhanced functionality noted above) to generate additional revenue. But it’s not going to happen in 2010. As CFO Peter Oppenheimer described their new advertising initiative today,
We’re putting our toes in the water, so don’t expect much from us this calendar year. We think we’ll learn a lot for the future.