The Perfect Apple for the Living Room

Apple’s bland launch of a thinner Nano left the Mac faithful craving more. Now rumors are flying around the Net about a new device, with Apple retailers being asked to return their existing Apple TVs by Sept. 30 and mysterious placeholder SKUs showing up in Future Shop’s inventory system.

Apple (s APPL) dominates music and consumer mobility. The MacBook is selling in record numbers. But despite making consumer-friendly products for the whole family, Apple has failed in an increasingly important market that includes TV, movies, music and gaming, and will soon encompass videoconferencing, education and more: The living room. [digg=]

If Apple wants to be the digital hearth, it will have to do better than AppleTV, and the impending announcement may launch just such a product. So what would the perfect Apple consumer device look like?

  • TV tuner and set-top PVR to take on TiVo, with streaming and synchronization to Apple’s mobile devices, the way Slingbox does, handled through a more reliable MobileMe
  • Controllers with accelerometers and a set-top App Store to rival what’s on the iPhone and iPod Touch
  • Videoconferencing-capable features to connect a distributed family via iChat
  • Computing features (mail, documents and so on) that make it a decent set-top computer terminal
  • Broad support for emerging wireless standards, so it looks like a file server to other devices
  • Better integration with stereo systems, tied into the whole family’s iTunes accounts, on par with Roku or the audiophile-friendly Squeezebox
  • Good cosmetics so it can mount cleanly to a wall or behind a flatscreen

Why should Apple get serious about the living room?

1. Get iTunes into the home. Apple has the industry’s most successful entertainment delivery infrastructure, and Jobs has strong ties to the industry through Disney. But the company has failed to connect that infrastructure to consumers beyond iTunes and the iPhone. AppleTV is little more than an iTunes connector for televisions: Not enough TV to tackle Tivo, not enough mobile streaming to supplant Slingbox. Apple CEO Steve Jobs called it a “hobby.”

2. Push back at the consoles. Gaming has given Microsoft, Nintendo and Sony a shelf slot next to the TV. Nintendo’s Wii has especially broad appeal and is encroaching on learning and teaching with almost Apple-like individuality. But with the exception of casual iPhone games and some Mac software, Apple is shut out of the lucrative gaming industry.

3. Casual gaming. The success of Apple’s App Store (with 100 million downloads in the first 60 days) has given Apple a glimpse of how lucrative gaming can be. Casual gaming, which the industry estimates is a $2.25 billion industry, has a much broader market appeal than hardcore gaming — think boomers and kids weaned on Webkins. With an Intel-based chipset and plenty of casual games, the company could make iPhone games run on a set-top box and ink a deal with Disney to target the younger set.

Apple’s strong notebook and phone sales mean the company has a chance at mainstream households. If it’s going to win that war, it needs to leverage its mobile and entertainment strengths and take the fight to the heart of the household with a strong set-top offering.