Apple chief Steve Jobs candidly admits the digital home market was not easy: "All of us have tried: Apple, Microsoft, Amazon, TiVo, Vudu, Netflix, Blockbuster.Â We've all missed. No one's succeeded yet."
Job's admission came as Apple shifted strategy, offering 1,000 videos for rent--100 in HD--through its iTunes ecommerce portal and Apple TV set top box. Jobs admitted the download for sale approach had not lived up to expectations. Apple has sold about 7 million videos and while that is more than all other download services combined, Jobs said it's below expectations.
The video rentals will cost $4.99 for new release in HD, and will have a 30 day shelf-life and once started will expire within 24 hours of usage. But the show stopper in my mind is still the relatively high cost of the Apple TV box which sells for $229 and requires an Ethernet or high speed wireless connection. Will consumers pay out such a large one off amount when around the corner Comcast is about to offer a box offering 6,000 videos--half in HD--as part of a cable subscription?
The home is the last big battleground and consumers face offerings from all the major players --Microsoft with its Internet enabled Xbox 360, Sony with similarly enabled Â PlayStation (plus Blu-Ray), LG which is partnering with rental house Netflix, not to mention a gaggle of set-top box developers--with internet adapter boxes as low as $100. All are jockeying for control of what many believe will be the key gateway to the home as residences and businesses move to an all IP platform. For the network providers--telco's and cable MSO's--their full-service business model assumes control of the home digital hub.
Jobs, till now, played down Apples TV strategy, famously calling Apple TV a "hobby." Now, he's hoping Apple's brand strength as a simple to use, easily integrated system, will finally win consumers over and give it leadership in a market expected to be 160 million big over the next five years.