5 Ways Apple Could Douse Fire TV

Apple's (NASDAQ: AAPL  ) billion-dollar hobby is under attack. Amazon.com (NASDAQ: AMZN  ) unveiled its newest product on Wednesday -- a set-top box dubbed Fire TV -- and it's everything people expected of the next Apple TV. The release comes on the heels of Google's Chromecast success, which offers users a more streamlined form-factor and interface. Both companies represent serious competition for Apple in the battle for the living room.

Here's a roundup of some features rumored to be part of Apple's next Apple TV iteration.

Siri voice search
One of the biggest features of Amazon's new toy is its voice search, which allows users to speak directly into the remote.

Source: Amazon

Many have speculated that Apple will include Siri voice search functionality into the next Apple TV.

Apple continues to make acquisitions to improve Siri. Most recently, the company snatched up Novauris, which specializes in local voice processing. That means a speedier Siri since you'll no longer need to connect to a server over the Internet to process what you just said. That could be advantageous on smartphones, where the Internet connection relies on slower cellular data. It could also trump Amazon's speedy Fire TV interface.

Better guts
It's widely expected Apple will upgrade the A5 chip in the current Apple TV to the 64-bit A7 chip, which is used in the iPad Air. Amazon boasts that the Fire TV has quad-core Krait 300 chip with a dedicated GPU and 2 GB of RAM. The A7 is arguably better than Krait chips with a recent study finding Apple's mobile chip is closer to "desktop-class."

The only thing holding back the A7 chips in iPhones and iPads is the battery life -- not an issue in a set-top box -- and the amount of RAM. If Apple boosts the RAM in its box, it can easily boast specs better than Amazon's Fire TV.

Improved user interface
Amazon doesn't try to put everything into a neat little box with the Fire TV's user interface. Instead Amazon displays movies and television shows right next to apps and games.

The Fire TV UI Source: Amazon

This is in stark contrast to Apple's grid of apps. There are rumors that Apple will revamp its user interface in the next Apple TV, blending TV listings, web videos, and apps together.

User interface can be a big differentiator in these increasingly homogenous devices. Google took an interesting approach by putting the user interface on the devices you already own -- your laptop, tablet, or smartphone -- and with a push of a button, you can stream almost anything you'd want to your TV. This may be one reason why sales have done so well. That and the price tag.

Games

Source: Amazon

Where Fire TV really shines is in its gaming capabilities. Amazon has invested heavily in gaming, recently purchasing Double Helix studios and developing games itself. Its flagship game is a third-person shooter called Sev Zero, and it comes free with the game controller.

The Fire TV is one of several new Android-based gaming consoles hitting the market in the last year. Despite these systems using Android, however, Google will be hard-pressed to capitalize on the trend without releasing a console of its own due to the dedicated game stores from each console maker.

Apple may include an App store with games for the upcoming Apple TV. Including the A7 processor will make it easy for developers to port iPad apps, and make new graphic-intense games specially for the set-top box.

TV subscription service
A couple of weeks ago, The Wall Street Journal reported Apple was working closely with Comcast to offer a new streaming television service. While still just a rumor, Apple could shake up the entire television industry with a live streaming service, as WSJ detailed in its piece.

Still, the odds of Apple securing the rights to live programming and procuring the proper agreements with ISPs to ensure quality of service before it releases the next Apple TV seems far-fetched. It may be able to work closely with a cable company like Comcast to better integrate its programming guide and live TV into its user interface, though. That would be a major step up from what's currently available.

Fire in the hole
Amazon's entry into the set-top box market is trouble for Apple TV. Apple prides itself on making the best products in the categories it competes, and the early reviews of Fire TV indicate that it's been unseated from that position. Moreover, Amazon has the marketing power and ecosystem to compete with Apple.

Apple may release a new Apple TV as early as this year, according to analyst Gene Munster. When it does, it had better include at least some of these features to keep consumers.

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