Companies take on the Apple TV that doesn’t exist yet - CES 2012

At the 2012 International CES, the major consumer electronics vendors were hard at work pre-emptively making the case against a product which thus far only exists in rumor – Apple’s connected TV set.

01/18/2012


IMS research: excellence in market intelligneceAt the 2012 International CES, the major consumer electronics vendors were hard at work pre-emptively making the case against a product which thus far only exists in rumor – Apple’s connected TV set. Though Apple’s rumored Sharp-manufactured TV has yet to appear or even have any official details released, it seems that the top CE companies have been busy working on connected TVs that incorporate features aimed squarely at Apple’s offering. Collectively, Samsung, LG, and Sony showed off a host of next generation UI technologies and features, including: gesture, motion, and voice control; revamped user experiences optimized for these technologies; cameras for video chat and facial recognition; cloud-based content sharing; more-refined DLNA-based sharing of content across devices; and utilization of tablets and smartphones as connected companion devices to the TV viewing experience. Many of these features, or ones like them, have been expected to appear in Apple’s rumored TV.

In addition to the aforementioned, there were other notable factors highlighted at CES that may hinder Apple’s competitive fortunes in the TV market. Samsung’s Smart TV platform now boasts over 1,400 apps – a library having arguably all of the essentials needed by consumers for their connected TV experience. Google TV made a resurgence, with Sony, Samsung, LG, and Vizio all on board for version 2.0. Sony, LG, and Samsung continued to showcase pay-TV applications allowing the connected TV to replace a traditional set-top box. Companies also demonstrated the latest versions of their alternatives to Apple’s AirPlay, to ease media sharing across different devices – Samsung with AirShare and LG with Smart Share Plus.

Perhaps the largest issue for Apple that has yet to be directly and overtly exploited in marketing by competitors, is access to content. The company continues to have issues with licensing content from content providers, and late last year had to stop offering TV show rentals through iTunes. The breadth and depth of content available via iTunes, and by extension Apple TV and any TV set that Apple launches, have largely been acknowledged by industry reviews as limited compared to that of alternatives. Apple’s traditional style of revenue sharing does not seem to mesh well with the entertainment industry in the video arena, with CBS’ comments in the past that the ad split desired by Apple for video content was undesirable. It is expected that Apple will continue to face challenges in expanding its content offerings for at least the near term.

With more vertically-integrated CE heavyweights such as Samsung and LG already deploying variations of the rumored functionality that was expected to be a differentiating factor in an Apple TV, and also better-equipped to utilize price differential as a weapon, Apple faces a difficult road ahead for Apple TV and any potential TV set that is launched. Apple will need to price its rumored TV set more competitively than it has priced its products in the past relative to the competition, and will need to have a strong feature set and usability advantage – its competitors have already beaten them to the punch in incorporating the same next-generation UI technologies, combined with more diverse content offerings and a “good enough” answer to AirPlay. Though the Apple brand is strong enough to overcome competitive barriers that stop lesser companies, connected TVs are expected to be the toughest market for the company yet.



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