Under Steve Jobs, Apple (NASDAQ:AAPL) always managed to stay a step or two ahead of the competition. The iPhone was years ahead of what anyone else was doing, the iPad basically invented a category, and even the Apple TV was ahead of its time for a while. But it appears that smartphones and tablets have reached a level of sophistication that will be hard to top until holographic displays or something crazy like that is invented. Where Apple can really change the game is with TV -- and judging by the companies getting into the TV game, Apple better move quickly.
The battle for your living room
Does anyone really think that we'll be watching the same cable television of today 20 years from now? Streaming content has grown like a weed. Netflix and Hulu have grown, and as broadband speeds increase, more content will be available on demand. That creates an opportunity for the companies who can get the future of TV right.
Apple TV was ahead of its time when it was released in 2007, but it hasn't taken the leaps forward that most users and observers had hoped. This is the biggest opportunity for Apple as competition for smartphones and tablets gets stronger. The company is losing market share in both categories, and history shows that for Apple to stay ahead, it needs to innovate a new product or category.
Lots of players in the TV biz
The challenge now is that Apple isn't the only one engaged in a battle for your living room. Google recently released Chromecast and is still trying to grow Google TV. Microsoft (NASDAQ:MSFT) is releasing Xbox One later this year, which will integrate with Skype, cable TV, and movies, and the Smartglass will act much like Apple's Airplay. Intel is also reportedly interested in television, and reports earlier this year suggested that it was willing to pay a premium for content. Of these three, Microsoft seems to have the most to offer when compared to Apple. It will be able to connect with Windows-powered smartphones and tablets. The Xbox 360 has sold over 77 million units, so it's clear the One's predecessor was an incredibly successful product with a solid base. The question with Microsoft will be around getting content on the device.
On the content side, Sony may have made the strongest move yet in revolutionizing TV after reportedly reaching a deal last week with Viacom to stream cable stations. At this point, it's unknown whether the Playstation 4 or another device would drive Sony's move into streaming content, but this is another player to watch, especially when you consider that Playstation 3 sold 77 million devices as well.
The first-mover advantage Apple used to gain share in smartphones and tablets won't likely be available in TV, even if Apple introduces an updated Apple TV or iTV now. But the ecostystem of music, movies, and Apps the company has built still gives it a leg up on the competition, at least in theory.
Is Apple too late?
The television industry has been in need of innovation for years, and one of the major technology players is going to make the next killer device to advance streaming. Apple could be the one to upend the industry if it doesn't wait too long, something investors should already be worried about. The company has the technology and the industry connections to make a splash in TV, and I think this provides the biggest upside for a company losing share in smartphones and tablets right now.
Fool contributor Travis Hoium manages an account that owns shares of Apple, Microsoft, and Intel. The Motley Fool recommends Apple, Google, Intel, and Netflix. The Motley Fool owns shares of Apple, Google, Intel, Microsoft, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.