Will GoogleTV light a fire under the AppleTV?

March 18, 2010 2:40 PM EDT

The New York Times last night revealed that Google, in partnership with device manufacturer Sony and peripherals manufacturer Logitech, were working on a 'GoogleTV'.

Yes, it is exactly what it sounds like and probably inevitable for the company that knows no bounds in their reach for the digital consumer.

But are there chairs being thrown in Cupertino?  Perhaps, but they've had it coming.  AppleTV could've been so much more than it is.  Apple could own this market, yet they've let all matter of competitors come in and take some space, including Boxee which rode to prominence hacked into an AppleTV.

AppleTV is a good product as it is, but Apple hasn't made the sacrifices it needs for it to be the hit that it very easily could be....like the iPod, for instance.

The iPod plays .AAC music from iTunes but also plays the generic mp3s that everyone has more of than they are willing to admit.  The iPod plays mp3s from Amazon (or from shadier sources) just like it plays AACs from iTunes.

That is why it was a smash hit. How many iPods would Apple have sold if they didn't play mp3s?

AppleTV, on the other hand, is a closed system.  You can't use your ripped DVDs (unless you've ripped them to .mov or H.264 with HandBrake, etc.) or any of the video (free or otherwise) that is all over the internet in .divx form.  You also have to have your movies in an iTunesaccount somewhere on your network.  What if I just want to store videos in a big fat shared NAS in my basement connectd via Gig Ethernet?  AppleTV is useless in this case.

You can't watch Netflix, Amazon or Blockbuster streaming video, nor can you watch the incredibly popular Hulu or any other streaming video outside of iTunes and YouTube (and with this news and other Apple-Google flareups, how long will this last?).

If you want to see what the AppleTV could be, install Boxee on it.  Sure it is a little clunky and is stuck with the AppleTV's 720P hardware limitation, but you'll see that there is a whole wide world of content out there.  Or, better yet, install Plex on a Mac Mini for an amazing 1080P mediacenter.  Apple could do this!

Speaking of Boxee, I really love their standalone 'two-face' remote (they should sell this by itself like Logitech).  Apple's remote is nice and simple but searching for something by keyword is a chore.  Sure you can hook up your iPod touch or iPhone (or iPad?) to make a much easier typing experience, but why bother?  Apple clearly hasn't put as much thinking/effort into AppleTV as others have into their set top boxes.

I've heard that Apple is waiting on a few things before they can proceed with their AppleTV plans.  One they control, the other is out of their hands.

First, they've been working on their own chip to replace the Intel processor inside the AppleTV.  If the Linux-based (like Android-based GoogleTV - which will run on Intel) Boxee Box can use the ARM Cortex A9-based Nvidia Tegra 2, Apple's chips surely can power a 1080P AppleTV. 

As an aside: Why did Boxee make its Box so obnoxious?  I understand the need to stand out, but after 10 minutes of looking at the Box's 'wow', it immediately becomes a monstrosity to incorporate into a home theater system.

It is very possible that getting that much power out of their processor isn't going just right or perhaps setting up an Apps Store ecosystem for TV isn't working out as planned. They are working on it as this recent Job Posting shows.

Or that the other component isn't going as planned:

Steve Jobs is  trying to get cable operators to agree to a plan where Apple sells just the most watched programs on its AppleTV for a certain set price.  A simplified cable service with only shows that people want for a reduced price.  Or sell TV episodes without commercials for $.99/each.

Apple, up until this point, could take its time getting a compelling product to market -- playing hardball with the networks and studios.  Now that Google is heading down the very same path, Apple might want to step up its efforts.

Some of what makes AppleTV compelling is YouTube.  What if Google offers a 1080P version of Youtube and keeps Apple where it is currently at...or pulls its content from AppleTV like Apple pulled Google Voice apps from the iPhone?

Sure, letting other company's media on the AppleTV may sacrifice some iTunes sales for Netflix or Hulu, but Apple stands to lose a lot more if Google gets a footing in this space.

As MG Siegler points out, the GoogleTV might be exactly what's needed to get Apple to unleash the real power of AppleTV.