• Pondering the (Potential) Impact of Apple's New iTV Device

    Once again it's the silly season, when rumors and pronouncements about still-shrouded-in-secrecy Apple products start flying around the Internet, often forecasting a future radically changed by another wave of Steve Jobs' magic wand. The latest Apple product in the speculative crosshairs has been dubbed "iTV," and was originally described back in May by Engadget as an "iPhone without a screen" (and a phone for that matter), that would bring the world of Apple's App Store to the big screen and would also be capable of playing some flavor of HD video. It would also carry a surprisingly low (for Apple products anyway) $99 price tag.

    It's easy to see an iTV device being a volume success for Apple, though given its low price point, profit margins could be a different story. The groundwork for iTV's success has been laid by the massive success of Apple's App Store and iTunes, which would now would be inexpensively connected to the TV. The concept "apps on TV' is getting a lot of attention lately, with Samsung making a big push, and of course Google TV being primed to deliver apps from the Android Market.

    To be sure, there are some apps which are video oriented, like Netflix's and ABC.com's, both of which are hugely popular on the iPad. However, the vast majority of today's apps aren't about video, they're about location-based functionality, social interaction, gaming, etc. When accessed on the big screen, some existing apps will be enhanced, while for others TV access may feel neutral, awkward or irrelevant. In addition to current apps though, there are all the new apps that could be created for the TV (games come to mind immediately) that iTV would catalyze. In this light, the iTV, especially at its low $99 price, could be a very exciting product.

    When it comes to video however, it's important to keep expectations for the iTV in check. While Apple's famed ease-of-use will likely set a new standard for the connected device experience, satisfactory solutions for bridging online video to the TV have been around for some time now (e.g. gaming consoles, Roku, TiVo, direct laptop connects, etc.). There's no question having the bells and whistles of apps like Netflix's and ABC.com's enabled on the big screen through iTV - plus some potential interplay with the iPad - will be slick, but are they going to feel game-changing? I'm not so sure.

    The bigger question for iTV is whether it's going to have a substantial impact on today's pay-TV ecosystem as a whole. Some are already buzzing that iTV will be an over-the-top video enabling cable-killer (Digg's Kevin Rose was the latest to forecast this in a well-circulated post). Personally, I don't see this happening. As I tried to explain recently in "Why Apple Doesn't Have a TV Strategy," Steve Jobs' ultimate vision of Apple reinventing the pay-TV industry has hit a wall of objections from industry players who have no need or desire to see Apple enter their insulated, profitable corner of the world. With the exception of select cable content streamed to Netflix subscribers, once again it looks like Apple will be relying on its pay-per-use iTunes store to provide iTV users access to the latest cable programs. If that's the case then iTV will have as much impact on the pay-TV industry as the ill-conceived Apple TV box before it had (which was approximately zero).

    It's always possible that Steve Jobs will have a trick or two up his sleeve when iTV is revealed, likely in September. Maybe Apple will finally pony up some of its cash horde to gain direct access to cable content for inexpensive viewing? Or maybe iTV will have broader functionality, like what Google TV will have, which could add new value to existing cable programs? Nobody knows. For now, we can only speculate, and add VideoNuze's voice to the silly season's chorus.

    What do you think? Post a comment now (no sign-in required).

    (Note: Adam Wright contributed to this post.)