RSS RSS Twitter Twitter
apple news/media reports

03/16/2007, 10:45am, EDT

Friday, March 16th

Analyst on Apple TV in digital living room

Many investors are questioning Apple's ability to carry its formidable digital music lead into the living room alongside the market size of the digital living room, but Piper Jaffray senior analyst Gene Munster believes the Cupertino-based company is entering that market with a 10x lead over the next closest competitor -- Microsoft's Media Center. The analyst points to iTunes becoming the de facto "media center" application of choice, and estimates that there are 110 million active iTunes users compared to just 12 million active Media Center users. "We estimate the digital living room market in calendar year 2008 will be $4.7 billion, and we believe the Street is looking for $1.2 billion in Apple TV revenue in calendar year 2008," Munster said. "We are currently modeling for Apple to sell 2 million Apple TV units in calendar year 2007. For every 500,000 additional units Apple sells, it adds $0.02 to our calendar year 2007 earnings-per-share estimate." Piper Jaffray maintains its 'outperform' rating on Apple shares with a $124 price target.

Munster suspects that iTunes is a "Trojan horse media center" that will give Apple a sizable early lead in the digital living room. The analyst believes that his estimated 110 million iTunes users represent the preliminary addressable market for the Apple TV, stacking up against the closest Windows Media Center.

"To compare, the closest Windows-based product is Windows Media Center, which serves as a media hub for music, TV, and movies on PCs," said Munster. "While the comparison is not apples-to-apples, as Media Center is part of the Windows operating system, we estimate there to be 23m Media Center-enabled PCs."

The analyst estimates that there are 12 million actual Media Center users, pointing to a 10x lead for Apple in the digital living room. That market, according to Munster, will likely total $4.7 billion in calendar year 2008, assuming Apple maintains its MP3 player market share in the living room of 70 percent, and that one in 10 iTunes users purchase an Apple TV in calendar year 2008. Munster believes that Wall Street is estimating 4 million Apple TV units in calendar year 2008 worth $1.2 billion in revenue.

"With a wireless media streaming device simplicity is key, and Apple carried its focus on simplicity to this product," the analyst noted. "During our tests of AppleTV at Macworld we found it very easy to use with a simple remote and intuitive navigation. The product answers a problem many users don't even know they have. Viewing downloaded content on a TV is presently too difficult for the average iTunes user. But with AppleTV, the connection with iTunes is made automatically and all of the setup takes place in the familiar iTunes environment."


Filed under: Apple

, , 10comments, del.icio.us, slashdot, digg, buzz , Twitter



10 comments
Reader Reactions (Please use <i></i> for italic text)

subscribe to comments
for this article




Expand All   Global Settings
Miglia
0
03/16, 11:09am, EDT
If only the thing also had Miglia TVMax capability. Eventually I suppose it will. It can be gerrymandered, but straight up would be so nice
Fresh-Faced Recruit
Joined Mar 2006
User is offline
Mac Mini +
0
03/16, 12:11pm, EDT
Mac Mini plus Tuner (TV Max)+eye TV, makes a very, very impressive home entertainment center. Just make sure you do the optical sound out for DVD's and music.
Fresh-Faced Recruit
Joined May 2005
User is offline
Why
0
03/16, 2:02pm, EDT
Why does Apple have to imitate TVMax? Why can't Apple just sell it right next ATV in the Apple Stores? Make bundles with TVMax, with DVD's or with iTunes Video "cash."

In other words why not let the mini and TVMax and AppleTV do it now, rather than wait for Apple to have the whole thing in one box? Cost?

The only advantage for Apple to make the whole widget is for ease of marketing and buying for consumers, but I bet the easiest way for Apple to make the killer system would be for Apple to just buy Miglia or partner with Miglia to put the whole thing in one box, with a discount.

BTW this is irrelevant for me for a few years anyway since, I like most of America will not get a HD TV in the near future anyway.

Fresh-Faced Recruit
Joined Apr 2004
User is offline
won't get PVR
0
03/16, 3:37pm, EDT
Analogue cable is on its way out and digital cable is proprietary in most markets. What TV standard should Apple settle on for the AppleTV if it were to gain PVR functionality?
Professional Poster
Joined Sep 1999
User is offline
People miss the point
0
03/19, 9:23pm, EDT
Why would Apple include DVR capacity directly to Apple TV? First, Apple wants you to buy content from iTunes, not get content for free. Accordingly, it makes little sense Apple would make Apple TV a DVR recorder unless the recorder only grabbed paid for content from iTunes.

Second, people asking for built in DVR features miss the whole point of Apple TV, which is to make the computer your digital hub. As soon as you start adding features to Apple TV, Apple TV becomes the digital hub not the computer.

You can see Apple's strategy by looking at the recent export to Apple TV feature found in Quicktime Pro. Anything that Quicktime can play can be exported to Apple TV. I suspect that you will see more content being available in Quicktime. For instance, perhaps, YouTube content.

Apple wants you to use your computer to capture an organize content. Apple TV is just the tool to get the content to your TV.
Fresh-Faced Recruit
Joined Jan 2006
User is offline
Ahhh..
0
03/20, 4:37am, EDT
Ahhh.. I see what they are going to do. Lets see if anyone else can figure it out. I'll give you a hint: Home video service (cable, fios). FiOS obviously has more of a chance, because people who have FiOS will likely be able to afford apple branded stuff. Apple sees the future once again, and you can bet your buttons you'll want to be along for the ride on this one.
Fresh-Faced Recruit
Joined Mar 2003
User is offline
Apple TV disappoints
0
03/23, 5:46pm, EDT
First, Apple TV delivers very poor video quality using compressed mpeg4 files that is not even up to VHS standards. Huge step backward from HiDef TV. Tack on expensive and tedious downloads, and the fact that it's more expensive than better quality alternatives. Only a fool would buy Apple TV online without comparing it in the store next to the signal coming back from a (cheaper, faster, better) hi-def video recorder like Tivo.

The fact that they blatantly buy time to be featured as "news" on CNN, MSNBC, Good Morning America, etc. (that's called "payola") goes on to prove that this greedy DRM corporate monster is no longer the warm fuzzy Mac company we grew up with.
Fresh-Faced Recruit
Joined Mar 2007
User is offline

Apple ipod Rocks

0
10/28, 1:32pm, EDT

I love my ipod from Apple and really enjoy it because it ROCKS!
http://www.ipod-repair-guide.com

Fresh-Faced Recruit
Joined Jan 2008
User is offline
Your Comments

In order to post comments: If you are a registered member, please login with your MacNN Forums username and password otherwise please uncheck the checkbox below.


Registered Member?
macnn forums login:

macnn forums password:

Not a member of the MacNN forums? Register now for free.

RSS Feeds

Have the latest content delivered to your desktop via RSS. Use the links below to get access to a specific blog, news, or reviews feed.



  MacNN -all

  MacNN Reviews

  MacNN Podcasts

  iPodNN

  Electronista

  Left Lane News
Want To Sell Your Laptop? Any Condition - receive Top Cash. Get an instant quote. Free shipping www.CashForLaptops.com

Internet Marketing School - 100% Online: Master SEO, SEM, E Commerce, Media & More with a U of San Francisco Certificate.

Buy from The Apple Store, iTunes.com, Amazon.com, TechDepot, OfficeDepot, Computers4Sure, or donate.