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Telcos Should Watch Apple's iTV

Sharing PC-based digital content sounds great, but Internet TV pioneers say Apple's upcoming iTV device may be a tough sell

January 8, 2007

3 Min Read
Telcos Should Watch Apple's iTV

Apple Inc. (Nasdaq: AAPL) is reportedly ready to unveil a new wireless media streaming device, code-named iTV, but some in the IP video business say the new gadget might not be a huge hit with consumers.

Many are expecting Apple CEO Steve Jobs to unveil this week the device he first called iTV back in September 2006. The device reportedly allows users to stream videos and music from their PCs to their living room entertainment centers.

Apple's iTV concept was introduced last September when Apple announced it would carry Disney movie downloads in its iTunes store. Apple said the device would connect to the TV using regular audio-visual cables, and would receive video content from PCs or Macs using a WiFi connection. The iTV device, Apple said, would cost around $299.

The iTV concept is an interesting one for telcos to watch, too. While allowing consumers to sit in their living rooms and enjoy content stored on their computers, the device essentially gives consumers one more thing to watch when telco TV and video-on-demand services aren't interesting enough.

Still, those who were first in the business of making Internet content watchable on a TV screen say Apple's taking a bite out of a tough business.

"They have a great brand, they have more titles than we had when we first started out, but they'll still have to convince consumers that they need another box in their living room, and I don't think it'll be an easy sell," says Dave.tv CEO Rex Wong.

Atlanta-based Dave.tv was one of the first companies to aggregate Internet video content and deliver it to a branded set-top box in the living room. "We didn't get much traction," Wong says. Dave.tv is now working on sending its Internet video to telephone and cable company set-top boxes that are already in the field. (See Will Telcos Want Their Dave.tv?)

San Mateo, Calif.-based Akimbo Systems also aggregates video content and delivers it via IP to its branded set-top boxes. Akimbo marketing VP Jim Funk says iTV's success will depend on the breadth of content it makes available to consumers. "Part of it is that nobody really knows what content they are going to make available; they have movies from one studio, Disney, and then they have TV shows," he says.

Still, Funk acknowledges a competitive threat from iTV. "Obviously, anybody selling Internet video that you can hook up to the TV is competitive with what we do," Funk says. "But it's kind of hard until we know the details to say much." (See Akimbo Catches Up to AT&T.)

Dave.tv's Wong sees the competitive aspect of iTV a little differently. He believes all Internet video players might benefit if the Apple brand can popularize the medium with content owners and consumers. "A rising tide lifts all ships," Wong says. (See Top Ten Video Sharing Websites.)

Along with Dave.tv and Akimbo, MovieBeam Inc. , Microsoft Corp. (Nasdaq: MSFT) with its Xbox, and various startups (like MyTVPal.com) are also, in various forms, sending Internet video to the TV. Apple is by no means the first. (See Survey: Internet Video Content and Microsoft to Sell VOD on XBox.)

Microsoft's Xbox team declined comment for this story. MovieBeam representatives did not return calls.

— Mark Sullivan, Reporter, Light Reading

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