Will Apple TV be a big success for Apple, or does the company need its iPhone mobile phone to be as big as the iPod?

Competition from Microsoft

Heynen claims Windows Media Center doesn't compete effectively with Apple TV. "While Windows Media Center does open up your PC to different content and channels and does help organise existing digital content, it's very tough to get used to and it's slow. Plus, you have to launch it on the PC. And most people aren't going to stick a Dell computer in their living room," he explained. In contrast, Apple's content is available directly from the TV screen.

Apple TV vs Apple iPhone, part I, click here

However, Microsoft's Xbox 360 console can already be used as an extension to Windows Media Center and the company has promised to beef up those capabilities even more, turning it, in essence, into a set-top box for IPTV. But the idea of buying a games console for managing internet-based programming won't be appealing to many people.

And the two companies are aiming at different targets, Heynen said. "Apple is going after the early video on-demand market, while the Xbox is limited only to service providers that support it."

Potential pain

NPD's Rubin said Apple TV could be a big success, but he's not as confident as Heynen. For one thing, the technology is complicated. "There are a lot of moving parts," Rubin said. "There's the PC, the network, then you have to connect it up to your television. Broadband is a factor if you want to download commercial content."

"Apple TV still requires effort from the consumer, more than calling the cable operator and having the person come out and install it," Olausson agreed. And this potential level of complication could mean that Apple TV won't succeed in the same way iPod has succeeded.

"With the iPod, it was the Walkman of the 21st century," Rubin said. "That was easy to understand, but with Apple TV it will take some education."
Another impediment is that serious competition is starting to shape up, and not just from Microsoft.

"Some companies are building those same capabilities into their televisions," Rubin said. "HP is one company. Sharp has said it will ship such a TV, and Pioneer says it will ship TVs that can stream content from PCs. The technology could be embedded, so you wouldn't have to be concerned with a separate box."

In the end, though, the success of Apple TV or similar technology will depend on how much content is available.

The iTunes store in the US is steadily "increasing the video library, and that will give consumers some incentive on Apple TV", Rubin said. "But you have to consider whether what is being offered can't be obtained elsewhere. Every movie is available on DVD, and every TV show is available on cable or satellite. There's a very high overlap between Apple TV, and cable and satellite providers."

One thing that the experts could agree on is that, over time, when lots of video content is available for download and the idea of using a product such as Apple TV to manage that content is widely understood, consumer behaviour will change significantly.

This story appears in the June 07 issue of PC Advisor, onsale now in all good newsagents