Steve Jobs had long called Apple TV a "hobby." But with more than $1 billion in sales for the device last year, CEO Tim Cook recently conceded that "It's a little more difficult to call it a hobby these days."
The marketplace has certainly changed since Apple TV debuted in 2010, with Chromecast and better-designed, entry-level Rokus coming in at half the price or less. Plus, new smart TVs finally are finally earning the name, and the Xbox One is emerging as a master entertainment manipulator. In this environment, Apple will have to do a lot more to compel buyers.
If Cook means what he says, here are seven things that Apple should do to prove it means business with the next Apple TV.
1) Clean up the Interface
Since 2010, when Apple TV first began running apps with version 2, it's mainly just added more apps, rather than changing their organization. A heralded interface redesign in 2012 switched the apps from a list to big icons, and spiffed up the look and functions of iTunes offerings, but it didn't change the overall organization and navigation. And with about 30 app icons now preinstalled, the home screen is getting crowded.
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Here, Apple could learn from Roku. That company's boxes largely eliminate the need to dig into apps, thanks to a universal search that looks for a movie or show across a growing number of video services, including Netflix, Amazon, Vudu and even less well-known sites such as Redbox and Crackle. Viewers can click on the service with the best deal, due to price or the subscriptions to services such as Netflix that they have.
Another thing Apple could learn from Roku: put a clearly labeled Home button on the remote. Currently, getting back to the main menu requires either continually hitting the Menu button or learning the secret trick of holding the Menu button down for three seconds to jump home.
2) Tone down the iTunes promotion
Apple takes about the top one-third of the screen to promote its various iTunes content — TV shows, movies and music. Of course Apple wants to steer people to its own iTunes store. But this heavy-handed approach hurts the entire user experience, especially because it kicks out popular apps Apple sees as competitors. Forget about watching "Alpha House," "Betas" or the new pilots from Amazon. (Unfortunately, Roku is even worse. While that box includes about every video service imaginable if you dig into its channels, Roku's in-house video provider, M-GO, takes up nearly the entire home screen if you click on "Movies" or "TV Shows" on the main menu.)
3) Let apps be free
Apple's desire to create a consistent interface on Apple TV is admirable, but also stifling. That autoplay of next TV episodes that Netflix does? It doesn't work on Apple TV, as that would deviate from the ponderous navigation imposed on all of Apple's apps. For example, after you click on the name of a TV episode you want to watch, you reach another screen where you have to click a Play button. Netflix, Crackle and Bloomberg TV are very different services with different offerings. They don't all have to look the same at the expense of innovative features. Roku provides tools for creating apps, and has to approve them for usability, but it lets each content provider try its own format.
4) Make AirPlay for all
Apple TV offers up one of its best extra features in AirPlay, technology that lets users beam audio and video from computers and mobile gadgets — assuming those devices are all made by Apple. People spend ever-more time looking at the small screens in their hands. But when it comes time to watch a show, the big screen enriches the experience. And no one does it better than Apple. Chromecast (for now, at least) is limited to showing only content from a handful of apps or content that appears in a Google Chrome browser window on a Mac or PC. And Miracast, the purported open standard answer to AirPlay, is so sparsely and inconsistently implemented as to be useless in most cases.
Expanding AirPlay to other devices is do-able, as third-party apps such as AirParrot for Windows PCs and AllCast for Android devices can get non-Apple devices on Apple TV. But if Apple made official AirPlay software for PCs and Android devices, this would encourage a lot more people to cast from those devices. (After all, when Apple came out with an official PC version of iTunes, the company went on to completely dominate the MP3 player market.) Clearly Apple would have to specify minimum hardware requirements to avoid disappointing PC and Android users who want to sue AirPlay (as it already does for Mac and iOS devices). But Apple TV's growth shouldn't be limited by whether or not users have other Apple products.
5) Make it a mini game-console
A PlayStation 4 costs $399, an Xbox One $499. While a $99 revamped Apple TV would be no match for those gaming beasts, it might offer just enough for mainstream gamers who tend to play on their smartphones and tablets. As the Apple TV already runs iOS, adding gaming capability wouldn't be a big upgrade (though it would require some onboard flash memory to store the games).
This wouldn't turn into the same kind of flop that the Android-based Ouya console was. That device required specially developed games, and not enough of those materialized. An Apple TV would offer the games people already know from other iOS (and Android) devices. Plus, gaming was the raison d'etre of Ouya; it would just be a bonus feature on Apple TV.
If players could use their iPhones, iPads or iPod Touches as wireless controllers, they'd get all the benefits of a responsive touch screen and motion controls, making the mobile games they already like feel familiar, but bigger. Who knows, maybe the rumored iWatch could interface with the next Apple TV?
6) Add HDMI pass-though — aka broadcast TV integration
An entire television made by Apple is unlikely: TVs aren't big moneymakers. But Apple could remake the TV experience with HDMI passthrough, running video inputs through the Apple TV box. The HDMI wire from, say, a cable-TV box would plug into the Apple TV, which would integrate cable content and control of the cable box into the Apple interface.
The Xbox One already does this, making cable TV one of several entertainment options — along with games, video apps and even Skype calls — that you can select. Using a controller, remote or voice commands, people can jump from playing a game to watching a show to chatting, and then back to the game again.
What's missing from the Xbox One is DVR integration. Perhaps Apple could solve that piece of the puzzle with the new Apple TV.
7) Add 4K video support
Outfitting Apple TV for the next-gen video standard may seem extravagant, but 4K is coming on strong. Average 4K TV prices will drop by about 50 percent (to approximately $2,700) from last summer to this summer, according to the Consumer Electronics Association. And some sets are priced way lower: Vizio hit a milestone by getting the price down to $1,000 for its upcoming 50-inch P Series 4K television.
And 4K video will start online. (Upgrading the cable broadcast system will take a long time.) Netflix will begin streaming in 4K later this year. Amazon is shooting all its shows in 4K, and YouTube is experimenting with 4K video. Apple could start offering 4K content through iTunes, as well.
Apple has been promoting Retina Displays on its iPads and MacBooks. So support for higher-resolution TVs seems to fit.
Whatever Apple has decided for the next Apple TV, it will have to do more than just play catch-up to Roku and other competitors. Apple, instead, has to create something generally new and unique.