Apple TV: What We Know, What We Don't and Why You'll Stand in Line to Get It

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Apple TV is going to change everything – sooner or later.

For the moment Apple TV is just a $99 set-top box that lets you access content from the Internet or your home Mac or PC.

It's a nice product, but it's not revolutionary.

But for Apple Inc. (Nasdaq: AAPL) to get anywhere close to that level, Apple TV will need features that radically improve, if not completely change, how people watch television.

One thing we know for certain is that late CEO Steve Jobs thought the television industry is "broken" and that he had a vision for revamping television as he had done with music and mobile phones.

"I'd like to create an integrated television set that is completely easy to use," Jobs famously told his biographer, Walter Isaacson. "It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it."

The main reason we don't have a Steve Jobs-like Apple TV now is that the players in the television industry are wary of Apple, having witnessed how the tech giant sucked the lion's share of profits from the other industries it disrupted.

The delay has given Apple's rivals a head start. Both Microsoft Corp.'s (Nasdaq: MSFT) Xbox 360 as well as Google Inc.'s (Nasdaq: GOOG) Google TV already do some of what Jobs envisioned.

But neither of those companies is likely to bring a solution to market as elegant and unified as Apple's.

What Apple TV Could Deliver

Based on news tidbits and patent filings, we actually have some pretty good clues about what Apple could do with Apple TV.

  • Integration: Steve Jobs said it himself. And when Apple's talking integration, they really mean it. A patent Apple was granted recently describes a device that can integrate content from multiple sources, such as a cable operator, the Internet, and a home Wi-fi network. And yes, that includes the cloud, or in Apple's case, iCloud. With iCloud, content could be stored remotely as well as streamed for consumption. The sources could be browsed – and searched — separately or in combination. So a single search for "Star Trek" could bring up movies you bought from iTunes and stored on your hard drive, an on-demand option from your cable provider for several Star Trek movies, and a list of channels currently showing Star Trek TV show reruns live.
  • Bottomless Data: Apple's patents also discuss using metadata – descriptive information about the video content – from multiple sources. This information can be displayed or searched, or used to get more information. This resembles what cable operators currently provide, but would be far more extensive. For example, a user could get not just a brief plot summary of a movie, but also information from the IMDB (Internet Movie Database) or Rotten Tomatoes (film rating) Web sites. What's more, the device could even access metadata for ads.
  • Interface: Regardless of whether it's a set-top box or an HDTV, the future Apple TV's screen will borrow from the current version as well as iOS, which runs the iPhone and iPad. That means at least part of the interface will be app-based. The current Apple TV has icons for Netflix and Hulu as well for movies, photos and music a user has stored on their computer. The next generation Apple TV will offer far more content, much of it app-based. Quite a few big networks already have apps for the iPhone/iPad, such as ABC, NBC, Showtime, USA Network and the Disney Channel (you still need service with a cable provider to access the content, however.)
  • Remote: Almost everyone hates their cable remote. It's loaded with confusing buttons, most of which are rarely used. Many believe "the simplest user interface you could imagine." is Siri, the iPhone's voice-controlled assistant. But Apple has also spent a lot of time working on a TV remote that uses the original iPod's scroll wheel. Don't be surprised if a future Apple TV remote includes the clickable scroll wheel for navigating lists and channel surfing along with a button for Siri. Voice control is better suited to switching to a particular channel or searching for a specific program.
  • Social networking: Some observers, like Forbes contributor Anthony Wing Kosner, think the proliferation of TV apps and the integration of the Internet with conventional cable will make it easier for Apple to tie TV viewing to social media like Facebook (Nasdaq: FB) and Twitter. People will be able to find out what their friends are watching and comment on it without accessing another device. Apple has already taken steps to integrate social media with its operating systems, so it's a logical next step.

While a future Apple TV (or iTV) may not include all of these ideas, it will have to include at least some of them if it is to make any significant impact. Exactly what Apple will release, however, remains a mystery.

Even Apple CEO Tim Cook doesn't seem quite sure what might evolve from this "hobby."

"This is an area of intense interest for us," Cook said at the All Things Digital Conference in May. "We're going to keep pulling this string and see where it takes us."

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