Apple's Coming Plan To Take Over The TV Business
Last week we released our newest report about the future of TV and argued in it and the accompanying blog post that the battle for the TV is not really about TV. It's about the future of the platform giants like Apple, Google …
Context & Ripple Effects
Forrester's new report lands on top of an unusually crowded rumor cycle around Apple's living-room ambitions. The Wall Street Journal reported back in December 2011 that Apple was plotting its TV assault, and 9to5 Mac had already framed AirPlay as Apple's go-to-market Internet TV strategy back in 2010 — so this analysis is the analyst community's attempt to explain what those signals add up to. Its core claim is deliberately contrarian: the fight is not about the TV set at all, but about which of the platform giants — Apple and Google foremost — ends up controlling the interface between viewers and content.
The story traveled widely on pickup alone: Fortune, CNET, ZDNet, VentureBeat and others ran versions within a day, which says more about how starved the market is for any hard information on an Apple television than about new facts in the report itself. Notably, the specific claim that Apple has a concrete takeover plan remains unconfirmed — what Forrester confirms is the framing, not the product.
First-order effects
- Content owners and pay-TV programmers now have to price in a scenario where Apple, not their current distributors, owns the customer relationship in the living room — every carriage negotiation gains a potential new bidder with the iTunes billing system attached.
- Google and Samsung's own connected-TV efforts are forced to compete against an expectation effect: consumers may defer set purchases waiting for an Apple television that has been formally announced by no one.
Second-order effects
- Apple's simultaneous tightening of its AirPlay ecosystem — settling the SimpleAir patent dispute out of court and signing a confidential license agreement, while pulling third-party streaming apps like Airfoil Speakers Touch from the App Store — reads as clearing legal and competitive ground around exactly the wireless-streaming layer a television strategy would sit on.
- If platform control rather than hardware margins is the prize, incumbent TV makers face pressure to open their sets to someone else's ecosystem or become commodity panels, accelerating partnerships like the existing ones Google has pursued with consumer electronics manufacturers.
Third-order effects
- The pattern points toward television consolidating into a two-sided platform business — app distribution plus content billing — where whoever controls the screen's software layer captures the economics that cable operators currently do.
- Patent settlements and App Store curation around media streaming suggest the next round of living-room competition will be fought through licensing and developer rules as much as through hardware specs.
The trend: Consumer electronics competition is shifting from selling devices to owning cross-screen software platforms, and the television — the last big screen without a dominant platform owner — is the contested territory.