Whither Apple TV?


Three years after the “DVD player for the 21st century” was first introduced by Steve Jobs, the Apple TV still doesn’t actually have a DVD player, and doesn’t actually have much of anything, at least compared to the competition. Apple’s (s aapl) media center device languishes as little more than a video kiosk for the iTunes Store in the living room. Meanwhile, competitors in the media center market stream the future to couch potatoes everywhere.

Boxee is just the latest example of that future. NewTeeVee reports the startup behind the media center software has just received $6 million in venture capital. This brings total investment to $10 million in less than a year.
According to CEO Avner Ronen, the company has recently seen “increased pace from the biz dev side.” Translated from marketing speak, that means consumer electronics devices want Boxee. The company plans to nearly double its staff off 11 to bring more content and more apps to Boxee. When a company with 20 people is handily beating Apple in the race to the living room, it begs the question: whither Apple TV?
After introducing the Apple TV in September 2006, then reintroducing it in January 2007, the device went on sale for $299. It was an awkward beginning. There was little content available for purchase, and the Apple TV needed to be tethered to a computer over a network to manage content. While Apple shortly added a model with a larger hard drive, it took a year before the company addressed the core feature.

“Apple TV was designed to be an accessory for iTunes and your computer. It was not what people wanted. We learned what people wanted was movies, movies, movies.”

So said Steve Jobs concerning Apple TV “Take Two,” the software update that allowed users to purchase and rent video content directly from their Apple TV. It was a badly needed update that put the Apple TV back in the game, but that was 18 months ago. Since then, the biggest news concerning the Apple TV was the company officially declaring it a “hobby.” Worse, at the conference call in October of last year, Steve Jobs remarked regarding the media center business that “I don’t think anybody has succeeded at it. And actually the experimentation has slowed down. A lot of the early companies that were trying things have faded away.”
This is just not true.
Besides the most recent news about Boxee, there have been other major developments related to media centers and content. At the same time the Apple TV was announced, Amazon’s (s amzn) Unbox service came out. Rather than fade away, it’s now HD. In May 2008, Roku brought out a $99 set-top box for streaming movies from Netflix. Shortly thereafter, Microsoft (s msft) brought Netflix to the Xbox 360. Let’s not forget Hulu, the aggregate video content site that appeared in 2007. Hulu has seen a five-fold increase in viewership since last year.
Streaming is the future for video in the living room, but the question now is whether Apple wants anything to do with the living room at all. Remember, this is essentially a software platform that can be updated at will. If there was ever a time for Apple to get back in the business of the living room, the expected Apple Event in September would be it. Let’s hope Take Two isn’t a wrap for the Apple TV.