Apple Marches into Living Room

In a special media event Tuesday, Apple unveiled slightly updated iPods, along with a new version of the iTunes Music Store that now lets you purchase downloadable versions of Hollywood movies. But the big news was a preview of a set-top box currently called iTV, which Apple says will finally put its digital media technologies in living rooms.

Like most Apple events, Tuesday's "Showtime" event was a bit hyperbolic. But Apple does control the digital music world, and the company has made incredible progress with downloadable TV shows and even an iPod/running shoe solution from Nike that has sold several hundred thousand units. Apple didn't surprise anyone with yesterday's announcements--almost everything the company announced had been leaked in the days leading up to the event--and it certainly fell short of rumors in a few key areas.

The new iPods are mostly rehashes of last year's models. The standard iPod--sometimes referred to as iPod with video--now gets better battery life when playing videos, costs less, and offers 80GB of storage in a high-end model. The iPod nano--previously Apple's best-selling iPod model--has been updated with an aluminum enclosure that solves two problems: It won't scratch as easily as the previous generation, and it now lets Apple ship the device in a variety of colors. The low-end iPod shuffle will be replaced as early as October with a new model that's half the size and costs just $79.

Apple's refresh of iTunes, its jukebox software and the front-end to the iTunes Music Store, is truly a major release. Apple has copied the visual media navigational features that Microsoft first introduced in the beta version of Windows Media Player (WMP) 11 last year, but with a twist: A new Cover Browser view style lets you flip through music via a graphical album-art view that's reminiscent of flipping through physical music albums. Apple has also integrated iPod management into iTunes and refreshed the iTunes UI.

In a well-timed move, Apple has bumped the quality of its downloadable TV shows and videos up from a paltry 320 x 240 to a more TV-friendly 640 x 480, although the company remains silent about the customers who have already purchased millions of shows at the lower resolution. Movies downloaded from iTunes will ship in the higher resolution (albeit with lower vertical resolutions for widescreen films) and cost $9.99 to $14.99, depending on the film. Unfortunately, only Disney has signed up to provide movies for iTunes, and only 75 films are currently available for purchase. Also, Apple offers no options for renting movies at a lower cost.

Although you might expect other major movie studios to sign on to iTunes at a later date, Apple's introduction of this service in the wake of so many other similar services--which offer higher resolutions (including HD films, in some cases), renting capabilities, and the support of the entire movie industry--suggests that Apple might not succeed in the movie business as quickly as it did in the music business. It's also surprising that Apple's set-top box device--the iTV--won't ship until after the crucial holiday selling period. If iTV were available now, it would be a blockbuster. As it is, Apple says it won't introduce the device until the first calendar quarter of 2007.

From a technical standpoint, the iTV isn't particularly compelling, as various hardware makers are already shipping similar devices. But the iTV features Apple's trademark software elegance and simplicity, and connects to Apple Macintoshes or PCs running iTunes over a home network, letting customers enjoy computer-based music, photos, movies, TV shows, and podcasts on their biggest TV. The device supports both wireless and wired networking connections.

If you're interested in Apple's announcements, I've got a longer analysis on my Internet Nexus blog.

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