How Apple Will Disrupt the TV Market

While Google and even Sony have tried to launch their own smart-TV projects, I believe it will be Apple who shows the world how to make a smart TV

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Which came first: the chicken or the egg? The tech industry has its own version of this riddle: hardware or software?

The answer perhaps depends on whether you’re a hardware or software engineer, but in most cases, the answer is hardware. When Eddie Roberts built the first PC in 1974, he did so by putting a series of processors on a printed circuit board and built a hardware shell with a screen connected to it to form a PC. As history points out, what he needed next was software to make it run.

For this, he turned to Bill Gates and Paul Allen, who created the first PC operating system for use with the Altair 8800. When Steve Jobs and Steve Wozniak wanted to make their own version of the Altair 8800, they built the PC hardware first and then created a dedicated set of software instruction codes to make it work. The result was the Apple I and II. And when IBM built its first PC, the company built a motherboard that used an Intel processor and onboard memory. But IBM too needed a software operating system to make it run. Like Roberts, they turned to Gates and Allen, and MS-DOS was born.

In all these examples, the hardware platform came out first, followed closely by an operating system and, just as important, a dedicated software-development kit (SDK) that software developers could use to create applications for these hardware platforms.

This pattern can be tracked to pretty much all of our smart-tech products. It starts with hardware, followed by a smart operating system, followed by an SDK. Apple created the iPhone and simultaneously built what’s now called iOS to give it intelligence. Apple then created an SDK for software developers to create apps for use on this device. The same goes for the iPad. And while Google appears to have done this in reverse by creating Android before the hardware to run it was created, the approach was similar. Andy Rubin knew very well that the hardware platform drove the operating-system design, something he learned quite well from his time at Danger Inc.

Up to now, most televisions are relatively dumb. A TV is just a box with electronics and a screen. But they too are a platform. For the TV platform, the apps are TV shows. But for most TVs, there’s really no operating system with an SDK in which TV apps could work on a TV. This is about to change. In essence, Apple has said a smart TV needs a smart operating system. The company delivers that by using iOS on its current Apple TV offering. What has been missing are the APIs or a software-development framework for developers to create smart apps to be used on Apple’s TV platform.

While Google and even Sony have tried to do this with their own smart-TV projects, I believe it will be Apple that shows the world how to make a smart TV. Apple will do this by tying it to a very rich, smart operating system and give its developers a powerful set of development tools to create apps that interact with TV programs. Think of this as Apple giving us a TV platform to develop on just as Apple gave us the Apple II platform and IBM gave us the PC platform that, coupled with software, drove these devices to great heights.

We know Apple has been working on this strategy for at least five years with iOS. Apple can eventually take full advantage of this very rich operating system with its external Apple TV boxes to make them much more intelligent. And if Apple decides to make an actual line of TV sets, we suspect that the equivalent of Apple’s external TV box would just be integrated into the set itself. The user experience could then be made even richer by adding special interface features like gestures. The iPad and iPhone could also be used to deliver enhanced navigation and content.

Since the launch of the PC, which used a dedicated operating system and a set of tools to create apps for the PC platform, it has become clear to me that hardware is followed by a software operating system and then a software-development kit. When combined, these three aspects make the platform sing and dance. While hardware is critical to the platform, the real magic comes from the software and the apps created with the operating system’s SDK. For Apple, the next exciting step would be to unleash the unrestrained creativity of its software community by providing it with a TV operating system and an SDK. That would give developers the ability to create apps none of us could even imagine today.

Interestingly, in this model, it is not necessarily important for Apple to even make a dedicated TV set, as some have suggested it might. For all intents and purposes, an Apple TV set would just be another screen with an embedded operating system capable of running programs developed for use on Apple’s TV — the same as how the iPhone and iPad are just another screen to house iOS and its apps. What’s different here is that the user interface and interactivity with the TV itself would be very different from that on the iPad and iPhone. And unlike Intel, which is trying to cut deals with the studios to deliver content directly from the creators of TV programs to be delivered to Intel-based tablets and smartphones, Apple would not necessarily need that level of content distribution to work.

Instead, Apple could give content makers the tools to create interactive apps around their TV programs, delivering an enhanced entertainment experience that supplements a person’s viewing of the program itself. For example, with a powerful SDK, Apple could give ESPN the ability to overlay all types of sports statistics about the game you’re watching either on the TV screen itself or on an iPad serving as an extra screen.

Or the developers of Jeopardy! could let people at home play the game on their iPads, trying to match the answers in real time. The producers of Castle or NCIS could create interactive games tied to the programs that let people try and guess who committed the murder as more and more clues pile up during the shows. With a little imagination, you could take just about any TV program and give its producers a smart-TV platform, a smart operating system and a developer kit that would allow them to create all types content tied directly to their shows, making them more interactive and fun to watch.

This does not mean that Apple may not also do content deals with the studios like Intel is trying to do. However, if Apple does cut deals with the studios for the direct distribution of content, you can bet that it would have more of an e-commerce link that would work best on the Apple TV platform.

One could say what I suggested here is just speculation. However, if you look at the history of the technology market, you can see that once a hardware platform is established — given a smart operating system and tools to create great apps and services — then it takes off and disrupts existing markets. Given the historical perspective that can be applied to PCs, tablets and smartphones, it seems highly likely that the next major device to get a platform, a smart operating system and software-development tools will be the television. And if I were a betting man, I would bet that Apple would be the first to put all of these pieces together.

Bajarin is the president of Creative Strategies Inc., a technology-industry-analysis and market-intelligence firm in Silicon Valley. He contributes to Big Picture, an opinion column that appears every Monday on TIME Tech.

16 comments
aztinn
aztinn

I agree to this because Apple can refine what Microsoft did with Xbox One http://www.youtube.com/watch?v=KbWgUO-Rqcw

Pretty much what Apple did on flat design in IOS 7 which was originally in Microsoft's Windows 8 and HP's WebOS

j4rgon
j4rgon

I may be crazy but doesn't what he is describing already exist with the various GoogleTV boxes out there?

stashgumbo
stashgumbo

This platform already exists and has for years it is called XBMC. XBMC now runs on very inexpensive ARM box that can be purchased for less then 100 dollars. What makes sense is to integrate free and opensource technologies like XBMC and Android into TV's to allow developers to create applications based on open and standardized APIs. The road block to this ecosystem is content providers desire to keep there content safe from possible piracy. The irony is that it is in fact those efforts to keep content safe that makes it impossible for any system of content delivery to work seamlessly across multiple content providers with a unified interface. What ends up happening is that people steal the content because it allows for a seamless interface that is not dependent on deals between TV manufactures and Cable Companies and other content providers. 

Raggedhand
Raggedhand

If we could predict disruptive technology we'd all be billionaires. For most of us, the paradigm will shift when we aren't looking and we will end up playing catch-up.  For those commenting who poo-poo speculation on disruptive technology, I would simply remind you that "out there" there are thousands of busy engineers and designers who are working their tails off.  Sooner or later, one of them is going to make some magic.  

As long as the engineer obeys the laws of physics, it's not a matter of "how", but "when".  What is speculated in the tech press about the next generation hybrids of computers and television isn't at all impossible.  No one is asking for a Star Trek transporter.  So creating a way to manage a couple hundred TV channels, add interactivity and control the process with voice or gesture is going to happen, if not by Apple, then someone else.

gaplato
gaplato

This is a non-story.  It's a piece of fantasy based on the hope that Apple can continue its iPod, iPhone, and iPad disruptive techno-streak.  The only way to shift the TV paradigm is to offer network style programming that bypasses the cable provider.   Cable companies should partner with tech firms or get out of the way of progress.  They have little incentive to do this considering that baby boomers are rock steady cable subscribers who are willing to pay upwards of $200 per month for packaged channels and mediocre broadband connectivity.

KaleoK
KaleoK

Mr Bajarin needs to be better informed. Google did not create Android; it acquired. Ditto for MicroSlop and MS-DOS.

EqbalAnwari
EqbalAnwari like.author.displayName 1 Like

Thank you, Tim Bajarin ! Excellent report. Enjoyed reading it. I think you are able to turn a war report into a fairy tale. 

expathos
expathos

TV's don't need to be smart. All they need to do is display a great picture and have DLNA enabled so that most engagement and smart features are pushed to a second screen device. 

HTML5 is the future of TV anyway. That's why Opera will sell 50 million TV licenses for their rendering engine.

Apple is too late, it's apps system is too closed (compared to web and HTML5), and too expensive to really have an impact.

brenro12
brenro12

Can't wait to play Angry Birds on a 65" OLED. Once again, the hyperbole surrounding an Apple product runs amok. Remember when the iPad was going to replace all the textbooks and every doctor was going to have one at their side?

Raggedhand
Raggedhand like.author.displayName 1 Like

@brenro12 All of my doctors DO have I-Pads and my medical records/MRIs/X-Rays/Rx are all digitized. Most of my students DO have their texts on a reader.  I personally keep all of my texts and manuals that I teach from on my I-Pad.

I'm living in 2013. What year do you inhabit?


brenro12
brenro12

@Raggedhand @brenro12 Public educational institutions have rather famously rejected lining Apple's pockets. None of the eleven orthopedic surgeons in this office use them. Are they used as you say? Without a doubt. Have they transformed the medical and educational fields the way these over-hyped articles want us to believe? Are you in love with the sound of your own voice Mr. Sanctimonious?

Raggedhand
Raggedhand

@brenro12 @Raggedhand Yes, my doctors in the major teaching hospital I go to use I-Pads and laptops.  Every school district (I'm in education) in my state uses Apples and has for the last 15 years.

So you're wrong. 

ericdomond
ericdomond like.author.displayName 1 Like

I look forward to rereading this comment in 5-10 years.