Apple products are always subject to rumor and speculation, so it's no surprise to see plenty aimed at the next edition of Apple TV. Most reports have a new version heading for stores this fall.
Some say to expect an option for streaming live TV.Others say to expect a new interface based on iOS.Would either make a difference? We asked three Fool contributors to weigh on the features that would be most meaningful, and most accretive to the overall business. Read on to see if you agree.
(access to Sling TV):While rumors suggest that the new Apple TV will have an app store, that doesn't mean the company will be throwing open the doors to any and all app providers. Apple has always tightly controlled access to its iPhone and iPad app stores, and it's likely to do so with an Apple TV app store.
One competitor it would logically keep off the platform is DISH Network's Sling TV digital streaming live television service, since Apple is expected to at some point announce its own live streaming service. But until that happens, Sling offers the best, cheapest way for cord cutters to access a number of top cable channels, including ESPN.
Still, even after Apple launches its own Sling rival, there's no reason to keep the DISH service out of its app store. Even though the two offerings will be competitors going after the same cord cutters, they will almost certainly have different price points and channel lineups. By offering both, Apple would appeal to a broader spectrum of customers, allowing it to sell more TV units.
Letting a competitor have access to your users can be an all-around win if offering that service brings more people to your platform. Sling would probably do that, and Apple would also be able to claim a chunk of its subscription revenue, which makes this counterintuitive move even more logical.
Keith Noonan(gaming features):Compared with streaming devices such as Amazon.com's FireTV and even Google's $29 Chromecast, the current Apple TV offers comparatively little in the way of gaming features. Withthe popularity of gaming still on an upward trend and the success of gaming apps on the App Store,expanding video game features in an update to Apple's set-top box looks like a no-brainer.
The current Apple TV doesn't offer support for iOS games, which is somewhat surprising considering that gaming downloads have delivered significant revenue for thecompany'smobile platformand becausethe Apple ecosystem'sconsumer base seems to bethe ideal demographic for paid gaming downloads and in-app purchases.
In the first quarter of 2015, Apple's App Store revenues were 70% higher than revenuesonGoogle Play, even though roughly 70% more apps weredownloaded on Google's platform. A quick look at mobile tracker App Annie's list of top-grossing iOS apps reveals that gaming applications are drivingpaid participation onthe App Store, so opening Apple TV up to gaming apps and improving related functionalitiesrepresents a clear way to improve sales on the set-top box and broader platform.
As the cord-cutting trend woos subscribers away fromcable andpromotes the distribution of content through set-top boxes, Apple will benefitby delivering a wide range of content that extends beyond traditional TV programming. Delivering improvedfunctionality for video games is a keymove that will make the new Apple TV better equipped to compete in thechanging entertainment landscape.
Tim Beyers (all-you-can eat subscriptions): A quick look at the Apple TV's current interface tells you a lot. From HBO and Showtime to custom on-demand channels from the likes of FX and USA to streaming from Netflix and Hulu, Apple's box offers what may be the most comprehensive programming portal the world has ever seen.
Now think about the potential installed base. Last year, CEO Tim Cook said the Mac maker had over 800 million iTunes accounts. What if Apple offered an all-you-can-eat Apple TV subscription to that group? How many would pay, say, $49.99 monthly to get HBO NOW, Showtime On Demand, Netflix, Hulu, and more?
There's no way to know for sure, of course. Yet research may offer us a hint. According to Nielsen, 12.3 million homes rely on over-the-air broadcasting.That's equal to roughly 11% of all TV-watching households in the U.S. and about 1.5% of the iTunes installed base. Surely a portion of those are cord cutters with access to broadband -- and perfect candidates for a more robust Apple TV with subscription choices. Now's the time to reach out to them.
The article 3 Upgrades We Want to See in the New Apple TV originally appeared on Fool.com.
Daniel Kline owns shares of Apple. Keith Noonan has no position in any stocks mentioned. Tim Beyers owns shares of Apple, Google (A shares), Google (C shares), and Netflix. The Motley Fool recommends Amazon.com, Apple, Google (A shares), Google (C shares), and Netflix. The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), Google (C shares), and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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