Is the Apple TV officially a flop? (Or: How to fix Apple TV)
It's been online for a few days now, but I just spotted (via PaidContent) Fortune's article entitled The iFlop (sub-head: "Steve Jobs tried to design—and dictate—the future of television. Here's how he failed.")
Context & Ripple Effects
Two weeks after Fortune branded the box 'The iFlop' — arguing that Steve Jobs failed in his attempt to design and dictate the future of television — the verdict is still echoing through the gadget blogosphere, with Crave picking it up via PaidContent. That makes the flop framing a durable storyline rather than one outlet's take.
The critique lands on top of earlier scrutiny of the product's economics: Business Week's June teardown of what Apple TV costs to make had already framed the box as a margin question, and now Fortune's piece reframes it as a strategic failure — Jobs, fresh off topping Blender's list of online-music powerbrokers, unable to replicate the iTunes playbook in the living room.
First-order effects
- Apple TV enters the holiday season carrying a public 'flop' label from Fortune, forcing Jobs to defend the box against the very narrative of inevitable disruption that carried the iPod and the just-launched iPhone.
- PaidContent's amplification shows the story has crossed from business press into the tech-blog audience that forms Apple's core buyer base.
Second-order effects
- Studios and cable gatekeepers reading the iFlop coverage gain leverage: if Apple's dictation model stalls in TV, content owners can hold out for better terms instead of conceding the iTunes-style single-price structure.
- Rival set-top and download efforts get an opening to court studios precisely because Apple's position looks weakest in this category.
Third-order effects
- If the pattern holds, Apple's device-plus-store formula proves category-dependent — dominant where Apple sold music players into a fragmented market, vulnerable in TV where incumbents control the pipes — setting the terms by which every subsequent Apple living-room push gets judged.
The trend: Consumer-electronics platforms are discovering that owning the hit device does not confer the same power over Hollywood and cable that the iTunes model held over the music labels.