Please ensure Javascript is enabled for purposes of website accessibility

Apple TV Refresh Matters More Than It Appears

By Andrew Tonner - Sep 16, 2015 at 7:42AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The stage appears set for Apple to challenge recent moves from Google, Samsung, and Microsoft for the future of the connected home.

By now, the core highlights of Apple's (AAPL 2.54%) special event last week have been analyzed and dissected more times than you probably care to recall. iPhone 6s. iPad Pro. Apple Watch. Updated Apple TV. It all seems so familiar by now.

However, Apple's TV refresh could be the most important strategic move to come out of the Sept. 9 event. In connecting Apple's TV refresh with several other recent moves from many of Apple's largest competitors, an interesting storyline starts to emerge, one that few are talking about.

The war for the future of the living room, and the smart home by extension, is slowly taking shape after years of discussion. Don't believe me? Let's take a look.

Apple strengthens its hand
Last week, Apple rolled out arguably the most significant overhaul to this fifth-generation Apple TV box since it launched the product in 2007, driving meaningful improvements on both the hardware and software sides of the device. On the hardware side of the product, Apple's most significant advancement comes from the improved remote control, which attempts to solve the problem of non-stop button clicking that occurs with traditional remotes with a new touch-enabled track pad at the remote's top. The updated remote also functions as a game controller, although initial reviews argue that anything beyond casual gaming is still best performed by pairing one of the many third-party controllers Apple TV now supports.

Source: Apple.

On the software side, the new tvOS Apple introduced with the product update is an almost spitting image of iOS, and that's by design. Apple mentioned numerous times that the future of TV and the living room entertainment experience lies in apps. In fact, Apple SVP Craig Federighi told one reporter that tvOS is 95% iOS. Siri also received some noticeable improvements as well. Hopefully, that's a quick enough glance to educate those still getting up to speed.

If you want to learn more, check out Apple's own website because the new Apple TV isn't the storyline deserving your full attention. Rather, the updated device is only the latest in a number of recent moves from many of today's largest tech companies that, in total, signal that the war for the smart home appears close to truly taking off. 

The revolution will be televised
Although it's still probably too early to start making 2016 predictions, I'm becoming increasingly convinced next year could conceivably become the year of the smart home, like 2015 was the year of the wearable.

Indeed, although almost certainly to presage the coming holiday shopping season as well, Google (GOOGL 1.77%) (GOOGL 1.77%), Samsung (NASDAQOTH: SSNLF), and now Apple have all unveiled devices that advance each company's smart-home strategy since the start of September. In case you missed these announcements, in addition to Apple's TV refresh, Google recently unveiled its next-gen OnHub WiFi router and IoT control center. Similarly, Samsung released an updated set of its SmartThings in-home hardware devices. And although not as recently, Microsoft's recent Xbox streaming integration with Windows 10 similarly brings the tech giant's core software and developer platform one step deeper into the smart home of the future.

From an investor's perspective, don't expect to these moves to create meaningful financial value for their respective companies in the short term. However, these moves in total signal an increased emphasis on bringing software into the home to an extent that's largely been overlooked until now. It's as if the tanks have reached the border, but the opening salvo hasn't yet been fired. The smart-home market offers ample growth opportunities to augment slowing growth in the smartphone and tablet markets in the coming years. So while Apple's TV refresh and its competitors' recent jockeying seem to set the stage for the smart-home space to emerge into the mainstream, only time will tell if this budding billion-dollar market will take off in the year ahead.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$149.24 (2.54%) $3.70
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$266.82 (2.03%) $5.32
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,329.46 (1.77%) $40.56
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,334.03 (1.66%) $38.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
338%
 
S&P 500 Returns
119%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.