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.