Before we start, I’d like to remind that this post, like all other posts on this site, reflect only my personal opinion, not of my employer.

There are more and more rumors that Apple will announce a new TV set around March next year, and the press speculates about its features and look.

Well, I think, TV sets have no future, and Apple will announce a TV set killer, not a better TV set.

Because, what is a TV set? It is a TV tuner plus a big screen. Modern devices have many additional features, including various inputs, network and Internet access, time shift, etc. But these features are all not defining. Remove time shift, and it is still a TV set. But remove the tuner, and it is just a monitor. But in broader sense, TV set is not only a device. It also defines how the television industry is structured. And it is also the way how viewers perceive role and place of television in their entertainment and informational workflows.

The life of a modern television user is hard. To operate the TV, he has (or expected to) understand

• the differences between analog and digital TV
• the differences between DVB-T, DVB-S and DVB-C
• the difference between free TV and pay TV, and understand the need of set-top boxes and CI slots and cards, and has to be a guru to understand what kind of set-top boxes is compatible with what kind of pay TV stations
• what do SCART, HDMI, VGA, DVI, S-Video, etc. mean and what adapters are needed or possible
• the difference between PAL, SECAM and NTSC
• How teletext, EPG and Hbb-TV are different from each other, and how to use all of them (differently for each TV station)
• CD, DVD, DVD+-RW, Blu-Ray, USB sticks, SD and CF cards: when to use them, and how to play their contents on TV
• Files: Xvid, DivX, WMV, AVI, MP4, MPG, MOV, MKS, RT, TS, VOD, M2TS… and how to play them on TV
• What is a media center, and why there are different media center concepts: a set-top box implementing media center functions? A Blu-Ray player with integrated media center? Media center in a hard drive? Or in the Internet router? Or in a NAS storage? Or inside a low-noise PC besides the TV set? And if using PC, what software to use: Windows Media Center, xbmc, … Or better an XBOX besides the TV extending the media center on PC?
• What is a game console, and what is the difference between XBOX, PS3, Wii…

I guess, there are a lot of paid jobs out there, requiring to know and to understand less than the TV industry currently demands from their customers to know and understand, just to be able to entertain themselves.

People are not like this. They don’t like knowing and understanding things. They just want to be informed and entertained, and the device in their living room should “just work”. No matter if they want to play a networked first-person shooter game, to check the current Dow-Jones index, to enjoy some movie, or to observe a football match – the device must work consistently and straightforwardly.

Apple’s success in other industries suggests that contemporary people are ready and willing not only to pay a huge premium to somebody who would allow them not knowing technical details, but also give up a bit of their privacy and freedom for that. This gives the possibility for Apple to enter to this market – the market’s consumers are ready for the change (they just yet don’t know it).

And they are ready for the change, because the current situation is so unsatisfying (from the usability perspective). The reason for that is the TV industry structure, consisting of stations, networks, and CE manufacturers. Heritage of governmental control times, this structure is the primary reason of the current deadlock and absence of innovations (3D video leading to headache and requiring to put on glasses, like children playing in doctors? come on! This is exactly what the most viewers were missing so far!)

Just think about it. CE manufacturers create screens attracting eyeballs of huge population for unbelievable several hours a day, every day. Social network startups capable to attract a tiny fraction of this love are being sold for billions of dollars. Yet the manufacturers neither able nor know how to monetize it. As a result they have to live on near zero margins. No wonder they cannot innovate; money is just not there.

And even those who have money, wouldn’t design their devices to be perfectly usable by the end user; instead, they design it to be conforming to various industry standards, and to be appealing to the sellers. Typically, earnings of TV set manufacturers depend not on viewer satisfaction, but rather on sellers satisfaction. It doesn’t matter how well the device can be used, it is only matter how well it can be sold. So, the usability of devices is just “nice to have”, and this is the reason of the famous “blinking 00:00 VCR display” issue: you have to bend your mind around to understand how to set the clock.

Network companies have had a terrible, huge, unbelievable high investment in the infrastructure and cannot allow any innovations not compatible with it, until the investment pays off. Their earnings do depend on user satisfaction, but they have educated the viewers that television HAS to consist from three components (the device, the cable and the stations), so that they are and feel themselves only responsible for their part and would therefore happily sleep another 100 years monetizing their DVB infrastructure.

Stations have potential, knowledge, understanding and talents to improve television and make it more immersive and more user friendly. Alas, they get all the advertisement money, so that their motivation is rather altruistic and artistic rather then dictated by the hard rule of the market. Besides, they don’t have the possibility to change technology used in the infrastructure and in devices. And developing their own devices and using another infrastructure (for example, Internet) doesn’t seem to be their core competency. The best they have produced (in Europe) in this area was the Hbb-TV.

Apple has the possibility to unlock it. The secret of success for their mobile devices was that they simultaneously:

• Own the usability and user experience of the device, both in hard- and in software
• Own the entertainment content distribution
• Partially control the network by partnering with mobile operators and providing their server backend for iTunes
• Partially control the marketing, by selling their hardware directly to the customers, on-line and in Apple stores, and selling the software via tightly controlled App Store.

These factors were responsible for providing entertainment intensity of levels of magnitude higher than those of Apple’s competition.

Apple also has experience unlocking such convoluted markets. The mobile market in the pre-Apple era has had similar issues: mobile operators invested in the infrastructure and wanted to sleep forever monetizing it, and device manufacturers didn’t sell directly to the customers, but had to satisfy the sellers (mobile operators and electronics chains) and couldn’t monetize the usage of their devices. As the history teaches us, people have readily paid up to 10x times more for something more usable, more immersive and more entertaining.

So, how this TV set killer device could look like? I don’t know. It depends heavily on talents Apple has, on result of negotiations with other industry players they might have conducted, on commercial feasibility of some specific technologies, etc, I have no idea about all that. If I was in charge and didn’t have any limitations, I would do the following:

1) Create a technology for games similar to XNA allowing to write games for iPhone, iPad, Mac and the new device, all using the same toolchain. And convince some key players in the game industry to port their successful franchises to this platform.

2) Ensure a live streaming cloud capable of taking broadcast signals and streaming them via the Internet in near real-time with high quality, no interruptions and integrated time shift and VoD. And convince some key TV stations to license their programmes (this is where Google TV has failed).

3) Partner with somebody helping me to convince others, for example with a best ISV in the country.

4) Create a device, which would have a big bright screen with the best video processing (400 Hz, motion compensation, scaling, etc), terrific multi-core processor with several TFLOPS, but still without any noisy rotating parts (I’m looking at you, XBOX), a modified iOS, huge and quiet HDD or SSD, best available Wi-Fi, perhaps some web cameras, but nothing else: no other connectors (except of power), and may be one power button.

5) Ensure all kinds of content can be streamed to the device via WiFi using the Internet protocol: VoD movies, music, and apps from the Apple store servers, live broadcast from the new cloud service, and user-own content from his Apple devices in his local network, or from his iCloud. As well as converting locally available signal sources (cable, satellite, VCR, PC) for those who still need them, using an optionally available adapter box.

6) Create a content-centered UX concept. Viewers wouldn’t switch between signal inputs (channels, connectors, sources) as they do now; they would choose between contents. Do I want to rent this movie, or watch that live sport event, or look at my own photos shot by iPhone and uploaded to the iCloud, or would I rather play this game? This is the kind of choice viewers will take. And for lean-back scenarios, a partner TV station network will provide some live channel that will be “tuned on” by default.

As for the actual interaction technology, I do believe Apple will invest much in it, be it just a remote control, Kinect-like NUI, Siri-like voice control, or something else. But in my opinion, this wouldn’t be a big variable in the equation. The mere absence of all this stuff users have to know to operate TV would be already a huge difference. The Apple’s device will “just work”, i.e. just inform and entertain.

If Apple will really do that, and this will really work, all the traditional industry players will have hard times competing. One realistic option would be to jump into the Google TV bandwagon, a similar strategy many mobile players went with the Android. Another one is to go with Microsoft, who have recently announced some interesting and revolutionary changes in the XBOX (which I to my confusion didn’t yet have had time to check out) and clearly aiming at the same market. And the last option: to give up the TV set market, and try to earn money on something else.

So, before I close this very long post and having predicted the close future, I’d also like to predict the distant future. After unlocking the TV market, where Apple will going to look next? My bet is that it will be cars and homes. Both industries are stagnating, both have a pretty awful usability (operating 3 pedals and several levers just to drive from A to B with high risks for the life? Ridiculous! Having to endure bad neighbours, just because it is so hard to move a house? Stone age!). So get ready for your iCars and iHomes.

And after solving that, we can then slowly approach what really matters: the human beings, with their bodies and their psyche…

NB. I’m sorry for typography of this post. “3D” and “PS3” look really awful. Unfortunately, I’m limited here by the standard WordPress editor and don’t know how to improve it.