Apple AAPL +0.87% is in the enviable position that its customers routinely think about not just if they will upgrade a given product but merely when. So if you are Apple, a big part of your growth strategy is to figure out how to balance a schedule of product updates with improvements that you can actually deliver. As Apple design lead Jony Ive says, “Different and new is relatively easy. Doing something that’s genuinely better is very hard.”
It is good for customers to be clamoring for a new iPhone, for instance, but not so good if they get frustrated by a long release cycle and go buy a Samsung. For this coming Tuesday’s event, it seems virtually certain that Apple will announce new iPads (both full size and a new Retina Mini), as well as new MacBook Pros with Haswell chips that will ship with the next version of OS X, Mavericks. All three of these, the iPads, the MacBook Pros and OS X, are on a reasonable schedule to match consumer demand.
In the long overdue category, however, is the Apple TV. Apple has not released a “generation” update of its “puck” since March of 2012 (it did come out with a minor upgrade in January of this year.) This has put a lot of Apple users, myself included, in the position of not wanting to buy an Apple TV because a new one must be just about to come out. This kind of lame duck gridlock is exactly what Apple tries to avoid with its product roll outs.
Three recent bits of news suggest that Apple will announce something significant about Apple TV on Tuesday that I predict will convince me and millions of others to get off the fence and buy one of the cute little $99 devices. (It is easy, of course, for me to make a prediction about myself!)
First, as Mike Elgan of Cult of Mac has detailed inthis post, Apple has been making a lot of new content deals with cable systems and content providers that are on their way to attaining a critical mass for consumers. Elgan writes that “for high-end TV enthusiasts, the Apple TV experience will become ‘indispensable,’ while individual cable subscriptions will be ‘dispensable.’” Deals with HBO, ESPN , Disney and perhaps now AMC are making Apple TV an all-in-one solution for more an more consumers.
Second, strange sightings on the French and German Amazon sites indicated the current Apple TV as out of stock but coming in stock on October 23, a day after the Apple announcement. This may be as erroneous as a previous rumor about a consignment recieved by Apple of “set top boxes” from China in September, but both rumors align with the common sense notion that Apple is due to drop a new Apple TV generation.
Third, Apple insider MG Siegler tweeted and then partially retracted the idea that a significant hardware refresh for Apple TV was coming this Fall. (His tweet read, “I guess those excited about a software refresh in a week are gonna be *really* excited when new Apple TV hardware is unveiled next month.”) What he seems certain on is that a new version of the Apple TV software will be appearing to coincide with iOS 7, Mavericks and all of these new content deals. In his post yesterday, however, he writes that, “I have heard is that the Apple TV project has been delayed a bit. That doesn’t mean we won’t see an Apple TV update at the event — we could see an updated unit with a spec bump or something. But the thing to be more excited about, the device with some sort of newfangled control system, doesn’t seem like it’s ready just yet.”
Furthermore, Elgan goes on to paint a picture of how Apple’s content deals will slowly but surely turn the tables on the cable companies as it builds audience and simultaneously hold the line on pricing. “As everyone races each other to the bottom of TV content pricing,” he writes, “Apple will offer a superior experience for TV while holding the line on pricing, eventually becoming the last place where content creators can actually made money from subscription service.”
Taken together, these threads weave together three possible scenarios for Tuesday. The first is that, as Siegler suggests, there is no magical new Apple TV hardware on offer, and in fact no new Apple TV hardware at all, just a significant software update. The second is that there will be a modest “spec bump” on the existing Apple TV but no wholly new control system or other revolutionary feature. The third would be a significant hardware upgrade along the lines of Siegler’s original tweet.
I’m going to predict that Apple will present scenario #2 on Tuesday. The fact is that any of these will make my want to buy an Apple TV in time for the holidays. Elgan says that on top of the 13 million Apple TV units sold thus far, “With compelling enough content offerings, that number could triple by the end of next year.” That’s no iPhone (or even iPad) but it’s beginning to sound more than a mere string-pulling for Apple.
The reason I am betting on the second narrative is that it is within Apple’s powers to make an upgraded Apple TV unit with specs to match the new OSs and content offerings. And although a big software upgrade and the notion that a really significant hardware upgrade is not in the offing will boost Apple TV unit sales (assuming they are in stock!) an actual new product to buy will boost them more. Given the inventory problems Apple has had with its iPhone launch, the somewhat hurried release of iOS 7 and the longer-than-expected gestation of OS X Mavericks, it is not hard to imagine that a bigger hardware refresh would be behind schedule. Best of all, in this case, would be if Apple signaled that a modestly improved hardware unit would be capable of handling significant software updates in the future capable of delivering the full experience that Apple has long promised but so far not quite manifested.
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