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The Next Apple TV Is Closer Than You Think

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We already know that Apple (Nasdaq: AAPL  ) is on the verge of announcing the iPad 3, which is now confirmed for March 7. Obviously, the tablet will be the feature presentation, but a less followed storyline is that the Mac maker will probably also update the small black puck that is currently the Apple TV.

That's right: I hate to burst your bubble, but I'm not referring to the real Apple TV full-size set that everyone is awaiting with bated breath. Hopefully, a minor refresh of the current Apple TV set-top box will hold eager buyers over until the real deal emerges.

One of the telltale signs that Apple is about to update any of its product lines is that its distribution channels to third-party retailers and distributors starts to dry up ahead of time as supply becomes constrained. Apple obviously doesn't explicitly tell its partners to expect an update, but the same story reliably plays out every time. This is exactly what's happening with the current box, including through retailers such as Best Buy, Target, and, among others.

Let's consider what to expect from an updated Apple TV set-top box. The current version uses Apple's custom ARM Holdings (Nasdaq: ARMH  ) -based A4 processor, which is now starting to age. The A4 was originally released in the first iPad in 2010 and subsequently made its way into the iPhone 4 and current Apple TV. Its successor was the A5, which similarly followed suit starting in the iPad 2 and then the iPhone 4S.

I'd expect the new Apple TV to carry an updated A- processor, either a rumored improved A5X or entirely new-generation A6. It may also incorporate Siri, as I expect Siri to find its way into every Apple mobile device released from here on out, and eventually into Macs.

I'm also betting that the expanded presence will benefit backend voice-recognition provider Nuance Communications (Nasdaq: NUAN  ) eventually, although Apple and Nuance's relationship status on Facebook would be "It's complicated."

The iPad 3 is practically guaranteed to carry a high-resolution Retina Display, which could easily handle 1080p HD content. As of right now, all HD content in iTunes maxes out at 720p, which is also the highest resolution the current Apple TV supports. Chances are that these two devices will launch simultaneously and set the stage for a broader migration within iTunes for 1080p HD content.

It might not be the full-size game-changing Apple TV, but it'll do for now.

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Fool contributor Evan Niu has a synthetic long options position on Nuance Communications and owns shares of ARM Holdings, Nuance Communications, Apple, and, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of, Best Buy, and Apple. Motley Fool newsletter services have recommended buying shares of, Apple, and Nuance Communications, creating a bull call spread position in Apple, and writing covered calls in Best Buy. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (7)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 28, 2012, at 8:26 PM, 13Capri wrote:

    Didn't Nuance already announce it is partnering with Panasonic for a voice recognition tv?

  • Report this Comment On February 28, 2012, at 9:42 PM, TMFNewCow wrote:


    -- Evan

  • Report this Comment On February 28, 2012, at 10:14 PM, 13Capri wrote:

    Panasonic and Nuance are ahead of Apple, Steve Jobs would not like that. Apple lost a great inventive mind. It was said there was talk of an Apple voice tv when Steve Jobs passed.

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