Google TV, Apple TV and content convergence

Google TV launches at the end of this summer. Hardware partners include Intel, Sony and Logitech. There’s an Android SDK coming soon, which will allow for full control of the TV from your phone.
Apple TV has been around in one form or another for a few years now, however, it remains, relatively speaking something of the backwater for Apple, however, recent reports suggest that this is about to change:

Steve Jobs’ “hobby” — the Apple TV — is slated for a radical revamp, an extreme price slice, and a future in the cloud, according to “a source very close to Apple.”

Engadget reports that the next version of the Apple TV will run iPhone OS 4.0, have only enough on-board RAM to function as a conduit to the cloud, and will cost a mere ninety-nine bucks. Today’s Apple TV runs a cool $229.

It looks like TV is another area that Google and Apple are going head-to-head. However, while Google’s business model is pretty clear – I think it might have something to do with advertising – Apple’s is a little less so, as the Register points out:

The Reg admits to a bit of puzzlement over the purported $99 price point. As Apple execs have admitted, as currently configured the iTunes Store is essentially a break-even business that’s designed to lure customers into buying Apple hardware and developers into building apps that also sell hardware.

But at $99 a pop, Cupertino won’t make beaucoup bucks from Apple TV hardware.

Perhaps the move is strategic for Apple, after all they are now one of the biggest players in the content market and it makes great sense for them to make a bigger play for the fast emerging web enabled TV market. And true convergence is upon us – that is to say we will all soon expect Internet, TV and mobile functionality from all our ‘screens’, be they traditional TVs or mobile handsets. We will also expect our content to be viewable on all these screens for the minimum of fuss (syncing, etc). In other words, we want an end-to-end product that allows us to watch half a film at home on TV, then leave for work and watch the remainder on our mobile without having to do any more than press a single button. The company that cracks this kind of seamless integration will have a serious advantage, and at the moment my money would be on that company being Apple; in iTunes they have an established albeit aging platform (it seriously needs an overhaul) which a huge pre-existing customer base. Apple’s also proved itself adept at looking at products holistically in the past.

However, it may not be as simple as that, Google’s platforms are ‘open’, it works with multiple hardware partners and allows end users much greater freedom to control the content they view. Android has recently been outselling the iPhone in the US, and though the new iPhone will probably reverse that trend for a little while, by the time the next iPhone appears in a couple of years of time, it will have lost significant market and mind share to a range of technically superior Android phones from a range of manufacturers.

And there are other new entrants to this market – the BBC trust just approved the VOD JV Canvas, and in the US Walmart intends to enter the market having recently bought Vudu.

And of course both Apple, Google and all of these new entrants may well end up as bit part players in this game, as incumbent cable and satellite operators gradually extend their capabilities and retain their customer base.

Either way, however, I do think that the ability to offer seamless content integration across devices will be key. And here, as I said, I think Apple has a clear lead.

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