Smart TV is ready for the Apple television moment

By Jonny Evans

Television is ripe for an Apple [AAPL] moment. When the Apple TV does appear, the company will once again exploit its talent to re-imagine existing solutions, adding a spice of new ideas competitors will as usual be waiting to re-imagine right back.

Apple's talent to surprise

The scenario is this: Smart TVs -- devices which marry some of the features of the Internet with some of those of DVRs and more are already here, but sales aren't stellar and many of the boxes that are being sold aren't being used.

Oh, it's not especially surprising. Marketing messages aren't making it through because the ads focus on geek TV, rather than television for the people. Couple that inefficiency with economic gloom and shockingly poor TV schedules and the Internet, not the TV, is the home media system of choice.

 Take a look at how these things are sold in the shops and you find retailers are undertrained, under-resourced and under-achieving. I mean, why else can a smart TV salesman not have a live Internet connection in their shop to show consumers what these things can do? It's crazy.

Keep on knocking

-- The scenario reminds me of the PC industry before the iMac. Yes, there were PCs, and some good ones, but everyone was using stupid external dial-up modems and the Internet was an ad-hoc afterthought, until the Internet-ready Mac.

-- The situation is reminiscent of the status quo for WiFi, prior to Apple re-marketing the standard as AirPort inside the iBook, giving birth to a global industry of WiFi hotspots and WiFi inside.

-- It's a little like the MP3 player market before the iPad, when technology fans would wave their little 128MB players and thrill that after only 30 minutes trying to comprehend the artfully-written instruction manual they had managed to get that new Dire Straits album onto their device. Dire Straits? Oh dear. The rest of the world used cassette at that time.

-- For smart TV, the state of play is very like the mobile phone industry pre-iPhone, when we all wondered if 3G video calling was really going to transform our sex lives when all we could see was pixellation, shadows and all we could hear was static. Now we have Face Time, of course.

Will Apple TV graduate?

Those growing rumors claiming Apple plans to upgrade its Apple TV "hobby" to an Apple TV business unit are gathering currency just in time for a wave of gloomy analyst reports claiming that while smart TV is hitting the market, it isn't generating too much excitement.

"According to the latest research from Informa Telecoms & Media, awareness of Smart TVs remains low as UK retailers fail to educate consumers of their benefits and provide even the most basic information regarding connected-TV features," the analysts claim in the latest press release.

"Informa estimates that 35% of all TVs sold this year will be "smart", however, this is a result of Internet connectivity becoming a "default" technology in more and more TV sets as standard, rather than an increase in consumer demand."

Retail fail

The Internet features aren't selling these devices. That's not great, if you think about it, right?

The analysis confirms retailers are behind the wave when it comes to evangelizing the technologies inside these big box babies. Like PCs, TVs are sold on technology data points such as resolution, screen size and so on. But stores don't even have decent Internet connections to show off what these devices can do.

"Retailers have failed to grasp the opportunity that Smart TVs provide them," observes Andrew Ladbrook, senior analyst at Informa Telecoms & Media. "Now more than ever actually experiencing the user interface and the additional services provided on a TV before buying in a store is paramount. As long as this situation remains the status quo, pay-TV providers will continue to benefit and will be seen as the providers of on-demand and catch-up services to the TV."

Apple meanwhile is cleaning up the set-top box market with Apple TV, which anecdotally I know is winning converts from the very perimeters of the Apple population. People like the ease-of-use and control. People like to watch a good movie, or catch that ancient series of 'Love Island' from time-to-time, if only so they can merrily chant along with the catchphrase from that latter series, "the plane, the plane".

This isn't a fly by, however. The market's failure to evangelize the technology some of the world's biggest firms are already betting millions of dollars on shows why Apple remains relevant in tech.

At its heart as a user-focused software company, Apple also understands that technology -- any technology -- is of little consequence if people don't actually use it. It understands the need to make interfaces simple and the special abilities of a product complex. Apple gets mass market advertising, and also gets the secret that if you want to get good sales you need to speak to the people, educate them, tease their interest in tech. Take a look at the wave of iDevice ads and you see the firm focus on use.

There's talk Apple will introduce its own range of TVs perhaps next year. When it does so it will enter a market that's soft and waiting for a market leader.

Dragon's den

If you imagine the TV market to be a dragon, then it will walk past the charred remains of Logitech, Google, Sony and others who have attempted to popularize the smart TV. (Sony could have introduced a PlayStation-integrated television with its own content store at any time in the last three years, but has abjectly failed to think inside that box.)

Will Apple best this mythical smart TV dragon, or will its charred remains lie, surprised and disappointed, beside the wraiths of those who failed to conquer this chimera before?

Given the popularity of the existing Apple TV and the strength of its content store, and its ability to deliver compelling simplicity, the company has a chance. However, inevitably it will be the market, and (sadly) economic reality which dictates whether Apple will burn in this new sector, or walk away with the dragon's prize. Though it does have a pretty good track record.

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