Steve Jobs Would Be Disappointed in Apple TV

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Reports are starting to leak about the next generation of Apple's (NASDAQ: AAPL  ) television gadget, and it's likely a far cry from what Steve Jobs was thinking about before he died three years ago.

"I finally cracked it," he told biographer Walter Isaacson in one of the more than 40 interviews that the two conducted during Jobs' final days. Jobs didn't elaborate beyond divulging that it would have "the simplest user interface you could imagine," but it was clear to Isaacson that Jobs wanted to do for television sets what Apple had done to computers, portable music players, and mobile phones. 

Chatter of Apple putting out a full-blown smart HDTV have all but died out. The emphasis now is on the Apple TV gadget that was already on the market before Jobs passed away. It actually hit the market the same year as the iPhone, and just like the iconic smartphone we've seen Apple improve the produce with every refresh along the way.

Fourth time's the charm
The Apple TV that is currently on the market is pretty slick. The third-generation Apple TV is a $99 set-top device that allows you to stream from the popular video services, watch some live sports and content from select cable channels, and beam content from your iOS device to your TV. That's not bad, but Google's (NASDAQ: GOOGL  ) Chromecast does a lot of those things, too, at a third of the price.

Apple needs to raise the bar, and apparently that means working with existing cable giants after failing to secure enough network content deals on its own.

The Wall Street Journal is reporting that the next Apple TV device will hit the market as early as June. Its original plan to offer live programming and entire seasons of current shows met too much resistance, so now it will work with cable and satellite television providers to acquire programming rights from media companies. In other words, this won't be the money-saving appliance that potential cord cutters have been waiting for. This is just something to enhance the fat cable bills that consumers are already tiring of paying. 

It's not revolutionary. It's not even evolutionary. Many pay TV providers have already been trying to make their subscriptions stickier by offering expansive pay-per-view at no additional charge for the channels that they're already paying for. The same approach has been part of the TV Everywhere initiative for consumers to be able to stream what they're already shelling big bucks out for in the first place.

No one gets the last laugh
When Google launched Google TV in 2010 -- a year before Jobs died -- it flopped because it assumed that it would get media giants to hop on to its platform. They didn't, and Google has retreated in size and price to the point where we get the pocket-sized $35 Chromecast. At the time, Apple staying on the sidelines and not following Google into rolling out full-blown smart televisions seemed, well, smart. It would bide its time until it had content producers on its side.

Well, how's that working out for Apple?

Introducing an actual TV would be silly at this point. They cost too much. They are too big to lug into your Apple Store. Technology is evolving too rapidly, and unlike your iPhone or iPad they also won't be upgraded every year or two. Thinking about a set-top box is the right way to go, but it's hard to believe that this is what Jobs was envisioning when he thought Apple had cracked the code.   

Apple wanted to think different, but Hollywood wants none of that. If the new Apple TV comes out as being reported -- and if this was supposed to be one of the new products that CEO Tim Cook and Carl Icahn are so excited about -- they're going to be as disappointed as Jobs would likely be.

Tech in the living is bigger than you think
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

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  • Report this Comment On February 13, 2014, at 1:22 PM, geoslv wrote:

    I'm trying to get a handle on this. I thought the idea was to get TV on the computer. From there you could display it on a TV. It's via internet.

    Someone could switch from cable TV to internet TV. Having a full cable package available from Time-Warner cable would fulfill that finally.

    What is everyone thinking? Just to stream directly to the TV? What for?

    Do you think your internet bill would stay the same?

    Do you think Comcast will continue with TWC's negotiations?

    Are there some reasons why Apple could not set up channel selection any way it wanted without forced bundles?

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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