Will AppleTV be a dud?

Will the greatly hyped AppleTV be a dud? According to Brent Schendler at Fortune, AppleTV is a dud. They even included alternative uses for AppleTV including a Sushi Platter:

Some complaints he makes include the low quality of videos. "it requires an HDTV, but the video you download is so low-res that it looks as fuzzy as plain old broadcast TV" -- Brent Schendler.

Another is that there is no way to order a movie directly from the iTunes store via your TV. You have to manually download it to your computer first.

On the positive side, YouTube and Apple made an agreement to broadcast YouTube through the Apple TV interface. Together with Apple's iTune monopoly which can be broadcast to the living room TV, Apple may have a chance to succeed with the concept of AppleTV.

But at this time, I don't think the product and technology is fully mature and widespread adoption may take some time. There's a user who says that he's been watching YouTube Videos on his Nintendo Wii for some time. There's another user on a bulletin board echo the complaints of the bad quality of the videos. Another user wishes that Tivo functionality can be integrated with AppleTV.

Granted, we are still at the beginning of the Digital Living Room Revolution. While AppleTV's product may not be the "It" product, if I were to handicap all the players in the Digital Living Room, I'd give Apple a good chance of having a good market share in the Digital Living Room. But not with the current AppleTV product.

Apple (AAPL)
Google (GOOG, owner of YouTube)
Nintendo (NTDOY)

Current Contenders in Todays Digital Living Room

When I say Digital Living Room, I am imagining a setup such as this:

1. High Definition TV Set
2. Comfortable seating to enjoy the Digital Living Room.
3. Broadband Connection.
4. A computer like device that interacts with the Broadband connection and the TV.
5. Interaction with a home network or an alternate computer (Optional)
6. Good sound system (nice, but not a requirement)

Before we get to the Digital Living Room of tomorrow, we have to look at today's technology and look at all the current contenders.

Contenders:

1. DVRs and Tivo (TIVO):

DVR is an acronym for Digital Video Recorders. While a VHS recorder recorded in a VHS tape format, the DVR records programs in a digital format in its internal hard drive. DVR's typically have a much better interface than the old VHS system. They normally incorporate a detailed Channel Guide, and a user can typically just choose which program to record very easily without having to manually set start and stop times. Certain other DVRs have much more user friendly features. Many offer to time delay live TV (want to pause the Big Game while you step out and pay the Pizza delivery guy? You can do that). Many offer you to easily forward through prorgams and commercials.

Tivo is a particular type of DVR (along with its software), and is often mentioned as the leader and innovator in the field. TIVO is publicly traded on the Nasdaq. Tivo has many other special features including a special program with Amazon to automatically download programs to the Tivo Box, and special features to access a networked PC's multimedia content including pictures.

2. Set-Top Boxes:

Many cable and satellite companies offer set-top boxes. These often connect directly to the broadband connection and the TV. They often translate the incoming signals (from Cable or Satellite) and send the data to the HDTV set including offering many digital channels and High Definition content. Some have the additional features such as offering video on demand. Some even incorporate a DVR to record programs in their internal hard drives.

DTV (Direct TV) and DISH (EchoStar Communications) are both satellite providers.

CMCSA (Comcast) is a cable provider who offers a set top box with video on demand, HD content and a DVR.

NNDS (NDS Group) and CSCO (Cisco, through their acquisition of Scientific-Altanta) are set top box makers.

T (AT&T) offers AT&T U-Verse, what they market as an IPTV solution. It offers similar functionality to Comcast who offer Video on Demand, Detailed Channel Guide and DVR capability.

Many other companies exist. What I list above are some examples.

3. Gaming Consoles such as Nintendo Wii, Sony PlayStation PS3, Microsoft Xbox:

Aside from being gaming consoles, these consoles can be entertainment centers as well. The PS3 contains a full Blu-Ray Player. Some people even choose to buy a PS3 not for the gaming capability, but to be able to watch Blu-Ray movies (can be cheaper than buying a dedicated Blu-Ray DVD player). The Nintendo Wii, even has the capability of integrating the Opera Internet Browser. Now, with the Nintendo Wii, you can browse the web using the Nintendo Wii controller from the comfort of your Living Room couch and enjoying a large screen HDTV set.

Microsoft (MSFT), Nintendo (NTDOY), Sony (SNE)

4. Windows Media Center

Windows Media Center is a Microsoft (MSFT) produced application that is designed to serve as a home entertainment hub. With tuner cards, Windows Media Center is capable of acting as a DVR. The Media Center can also have access to different media on the PC.

Working with a Windows Media Center Extender, media can be displayed on a display such as an HDTV set. Windows Media Center Extenders are "set-top boxes that are configured to connect via an Ethernet or Wireless network to a computer running Microsoft Windows XP Media Center Edition or Windows Vista Home Premium/Ultimate to stream the computer's media center functions to the Extender device. This allows someone to be able to use the Media Center and its features (such as view photos, videos, listen to music, watch live television and use DVR functions, watch recorded TV, etc.) on their television or other display device." (Wikipedia) The Xbox gaming console can act as a Windows Media Center Extender

5. Apple iTV:

Apple's iTV is a device much like a set-top box that connects directly to the HDTV set. This device can wirelessly (or through wires) sync up through a local computer which contains media including iTunes media. Now instead of watching the media in front of a small computer screen, this media can be viewed directly on an HDTV set in the living room.

AAPL is publicly traded on the Nasdaq.

6. Sling Media's SlingCatcher:

The company which brought you the SlingBox now brings you the SlingCatcher. This device can bring internet content to the Living Room HDTV display.

Sling Media is a privately held company.



More on this subject in the future.