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Microsoft's New Toy Is a Preemptive Attack on Apple

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A lot has been said about Microsoft's (NASDAQ: MSFT  ) Xbox One since it was introduced on Tuesday. However, here's something that you probably haven't heard: Xbox One is a preemptive strike on Apple (NASDAQ: AAPL  ) .

Think about it. Apple is working on a smart television. Shortly before his death, Steve Jobs told his biographer that he had cracked the problem with smart TVs. CEO Tim Cook told NBC's Brian Williams -- on primetime television -- that it's an area of "intense interest" at Apple.

Let's dream out loud. What would an Apple smart TV do?

Well, thanks to the popularity of Siri, it's a safe bet that there would be some degree of voice recognition. Xbox One has that. "Watch TV" switches to live TV. "Watch AMC" switches the channel. "What's on HBO?" pulls up the channel's listings guide.

Apple's device would also probably incorporate FaceTime video chat. Yes, Microsoft's all over that. The Xbox One allows for Skype video chats -- with multiple users at the same time.

Naturally, there would be some App Store integration with live content, but Xbox One is there already. You can pull up personalized fantasy stats during NBA and NFL games. You can be playing a Blu-ray disc and switch to a split screen to pull up Internet Explorer to figure out where you know that actress from through IMDB or pull up movie ratings on Rotten Tomatoes.

App Store integration naturally means playing games on your TV, and Xbox One naturally will have Apple beat on that front.

The clincher here is that Microsoft already has tens of millions of active Xbox Live users. They all won't hop on the Xbox One platform right away, but they will over time as prices get cheaper.

However, as expensive as the Xbox One will be, a full blown Apple HDTV will probably cost more than a Microsoft console with an existing flat screen. Now that we know that Microsoft will have its new toy out in time for this year's holiday shopping season, it's not as if Apple can get a head start here.

The more you think about it, the more you may start to realize that Apple may already be too late.

The only way Apple could realistically have a game-changer in an Xbox One world would be to revolutionize pay TV. Rolling out a piecemeal service in which consumers pay only for the channels that they watch -- or the content that they watch -- would more than justify Apple's inevitably high price.

The problem, unfortunately, is that cable networks have every reason to be uncooperative here. They stand to lose big money if Apple disrupts cable and satellite television providers. If Apple hasn't been able to get iRadio off the ground as negotiations with the music labels have been reportedly rough, how is Apple going to talk studios and content creators to disrupt a model that will save consumers money at their expense?

The Xbox One is bigger blow to Apple than you might think.

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Read/Post Comments (18) | Recommend This Article (7)

Comments from our Foolish Readers

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 May 25, 2013, at 3:02 PM, bluegill88 wrote:

    The deal with the NFL is great. The fantasy football stat integration is very cool.

  • Report this Comment On May 25, 2013, at 4:02 PM, kevins71 wrote:

    Umm, no it's not. Based on what "real gamers" are saying no one will be buying the Xbox One based on the DRM alone and the fact that used games can't be used with this POS. I'll stick with the $99 AppleTV over the $4 - $500 black brick. The AppleTV actually does more and connects the the largest online store for apps, music, games and movies and more. Xbox will not.

  • Report this Comment On May 25, 2013, at 5:42 PM, CrawFu wrote:

    Apple fanboys like kevins71 will always froth at the mouth over any Apple products and put down any competition, regardless of functionality. Feel free to roll your eyes at his comment and move along. "Real gamers" complaints are centered around the Xbox One seeming more focused on streaming video and non-game entertainment after the initial announcement. That's exactly what aspect of the system this article is referring to, and from what I've seen/read of both the Xbox One and Apple TV, Apple has a lot of work to do to catch up to Microsoft. "Real gamers" are not going to buy AppleTV, if they don't like the Xbox One they will buy a PS4.

  • Report this Comment On May 25, 2013, at 5:45 PM, VegasSmitty367 wrote:

    Apple will sue them!

  • Report this Comment On May 25, 2013, at 5:47 PM, psykodoughboy wrote:

    First off you need a HD receiver for the Tv thing to even work. how much is that going to cost? and no one cares about cable tv

  • Report this Comment On May 25, 2013, at 6:08 PM, LungsOfSteel wrote:

    Haters like CrawFu will always be disparaging peeps endorsing Apple products, even though said Apple product has yet to have its spec released.

    What it comes down to is - surprise! - buy what suits your needs.

  • Report this Comment On May 25, 2013, at 6:12 PM, CluckChicken wrote:

    "First off you need a HD receiver for the Tv thing to even work. how much is that going to cost? and no one cares about cable tv"

    First the 2nd part of that, between Comcast, Verizon and Time Warner there are about 50 million people that care enough about cable tv to subscribe to it.

    Now the 2nd part, if you have any of the HD cable services or satellite services you have an HD receiver. Now if you want to buy one on the open market they run about 100. If you are just getting all of your TV through Netflix, Amazon, Hulu or some other online service you obviously would not care about the "tv thing" of the Xbox One and would not need the receiver.

  • Report this Comment On May 25, 2013, at 7:38 PM, zhukov1943 wrote:

    "They all won't hop on the Xbox One platform right away, but they will over time as prices get cheaper."

    No, we won't. A lot of gamers are VERY angry about the "must connect online every 24 hours or you can't play" requirement, as well as the "pay fees to play used games" requirement.

    There will be an AWFUL lot of current console gamers that will just choose to sit this one out - and I'm one of them.

  • Report this Comment On May 25, 2013, at 7:53 PM, Efernal wrote:

    Never going to happen. The people who want the Apple tv box will get it because it is an Apple product. Others who are sitting on the fence ...Over 505 of those people dont want to known for having a Video game machine hook up to their tv. Or worse having the wort build and regulated set top box ever made.

  • Report this Comment On May 25, 2013, at 9:17 PM, smv7519 wrote:

    For those people who like to spend all their money on apple products let them. They are already behind on tech. By the way what is siri. That thing is worthless. I never bought an apple product in my life and im 37. Apple is for below the learning curb people. I like those fanboys buying apple so I can go get the newer tech. Please go buy apple fanboys do it.

  • Report this Comment On May 25, 2013, at 9:38 PM, Dreamer5794 wrote:

    It's 'learning curve' not curb oh smart one...

  • Report this Comment On May 25, 2013, at 10:09 PM, CluckChicken wrote:

    "A lot of gamers are VERY angry about the "must connect online every 24 hours or you can't play" requirement, as well as the "pay fees to play used games" requirement."

    Like many rumors neither of those are true.

  • Report this Comment On May 26, 2013, at 1:40 AM, patsaxon wrote:

    Both Google and Samsung is going to be competing against Microsoft, do not waist your money on this new product.

  • Report this Comment On May 26, 2013, at 5:08 AM, kilzone007 wrote:

    Ok, been using Mac's since 94. For xhits and grins; I still own a LE, a 76/120, and a Yosemite tower along with with my iPad, iPhone, Mac mini (wife), and 1,1pro tower (me). I'm musician and producer. I also dabble in graphic design and photography. Like it or not Macs have always been the standard for those who do what I do. It's been that way for years.

    I also own 2 Xbox 360's,(one for me and one for the wife) a Wii, and a PS3. I play games on them that's it, JUST GAMES!!!

    I watch Hulu, Netflix, and frequent KAT, and Vuze for all my movie/music/cable needs on my pro tower. All of which is streamed to my Samsung Smart and I don't have want or need cable.

    Personally, I think I've got all the bases covered quite nicely and I don't think I'll be buying a new Xbox or any more toys anytime soon.

  • Report this Comment On May 27, 2013, at 12:47 AM, Zeroxcool wrote:

    It is so funny to read the comments of the uneducated apple fan boys and the belief that apple is in anyway a competitive company for everything. They have this great new iMac that lacks this new reality of touch, come on, this alone is a "no thank you" most of the PC units that are not even close to the price of apple systems have this as standard. No one who is "a gamer" would even say the word apple so bringing this up in answer to this heading is just "you have no clue" and discredits you.

    The real issue is each country has different systems and media competition and Apple, Google and Microsoft to name a few is not going to create or change something that has been, in some cases regulated and in other unregulated and huge investments by those media companies. Integration is possible for the masses and compatibility for those who have realized that this is the way forward where it makes sense.

    If you want everything for nothing expect a product or system that takes your identity for a few free apps, if you want something that will support the standards and systems that can be integrated you might have to pay a reasonable sum. It's not like you are paying thousands of dollars for something that you may use once in a while, the advancements of Xbox One will be used everyday and by all of the family, not just kids. I don't know about you but when my wife says I want your clothes in the washing basket NOW. I would gladly be happy to support the functions Xbox One has.

    I have asked a number of PS3 owners why they selected it and they said two answers, the first was it was black and the other was it was because of the Blu-ray and than I asked them how many Blu-rays they bought in the last year and the answer was none. Good on you for being the reason why so many real gamers have an Xbox 360 (consider yourself not so smart or gamer, really)

    What the short of sight are not seeing is the second-hand market is making huge amount of money buying and selling products with low risk and when the playing field changes and the development companies that have higher risk can get the profits the buy and sell prices will change too. I would rather give the money (no mater how small) to a company that is able to make the next game better and not have to include marketing that distracts the basis of the true game.

  • Report this Comment On May 27, 2013, at 12:15 PM, madhadder2010 wrote:

    oh my, lol for all you knuckle heads, apple does it right. my phone never crashes. had my iphone4 for 3 years and i can sell it for 160 i payed 200 for it. and my iphone5 is fast as hell. my macbook pro is the best computer I've ever owned. the controls for it are far better than any computer before it. but i am a gamer and buy according to my needs. i own a wii and a wiiu. the wiiu is the best gaming for kids. my daughter loves it. but anyone who has given both ps3 and 360 a fair shake knows that a free network is better than a pay one. and the blue ray is nice too. oh and hope you never get the red ring of death. yes xbox is first to market over apple tv but no one is going to commit to xbox tell they see the new sonny and i bet both sony and apple will have more to offer than xbox. i love to see all the apple haters, hope your phone doesn't crash in 6 months. but when your sick of trying to fix, just remember we never have that problem lol.

  • Report this Comment On May 27, 2013, at 12:25 PM, madhadder2010 wrote:

    ha ha ha i didnt buy my ps3 because its black lol and blue ray is the only way to watch a movie along with my 1200 watt home theater system. but i have used and owned both ps3 and 360 and guess what they play games about the same but one is cheeper and plays movies too. oh what was for format of movie that you could play on xbox called crap i can't remember cause we all use blue ray. lol

  • Report this Comment On June 08, 2013, at 9:39 PM, zhukov1943 wrote:

    "Like many rumors neither of those are true."

    Eat your words, chicken-boy - Microsoft verified them BOTH earlier this week.

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