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'Tis the Season for Apple TV

By Richard Adhikari MacNewsWorld ECT News Network
Dec 22, 2010 5:00 AM PT

On the whole, this past week has been a pretty good one for Apple.

'Tis the Season for Apple TV

Apple TVs are apparently flying off the shelves. iPad sales are also strong, and the device is expected to remain king of the tablet roost through 2011.

Sure, a wave of tablets running Android and other operating systems is expected to hit the market in 2011, but right now, the iPad's lead remains tremendous.

Finally, Apple appears to have really listened to the customer -- in this case, ad buyers -- in loosening restrictions on its iAd mobile ad platform and releasing an app that lets anyone create an iAd relatively easily.

Steve Jobs' Little Hobby Paying Off?

When it was first introduced years ago, Apple TV was casually dismissed as the company's "hobby" by CEO Steve Jobs. Perhaps this was an attempt at keeping expectations low -- the device didn't sell nearly as well as superstars like iPods and iPhones.

Then in 2010, Apple brought out a new version of the device and offered it at the comparatively cut-rate price of US$99.

Customer demand has been stronger since, and Apple says it's on track to ring up 1 million units sold by the end of the week.

The device lets users watch high-definition movies and TV shows from iTunes and stream content from Netflix, YouTube and Flickr. Apple says iTunes users are renting and purchasing more than 400,000 TV episodes and over 150,000 movies daily.

With the introduction of AirPlay in iOS 4.2, users can stream music, videos and photos from the iPod touches, iPads and iPhones to their Apple TV devices.

That deep ecosystem may have been a major selling point for the Apple TV. It may also prove true for tablets.

"The most successful tablets will be those that leverage the broad ecosystem of a strong mobile platform," Al Hilwa, a program director at IDC, told MacNewsWorld. "They also offer synergies for developers, who can access other markets with the same mobile appliances."

Apple did not respond to requests for comment by press time.

Hail to the Chief Tablet

Tablet sales will total more than 81 million units in 2012, up from this year's 15.7 million, e-Marketer predicts.

The iPad will remain the market leader, with 69 percent of the sales worldwide, the firm said. However, that will be well below the 85 percent share it has this year.

In fact, computer hardware was the top growing category for holiday season sales this year, chalking up a 25 percent increase over last year's sales, comScore reported. Purchases of laptops and handheld devices like tablets and e-readers were the main drivers of this growth.

Going back to e-Marketer's projections, a somewhat smaller share of a market that has tripled means Apple won't be hurting at all. In fact, its continued dominance is cause for renewed confidence in the iPad.

More than 50 different tablet-based devices will be available by the end of this year, Jeff Orr, a principal analyst at ABI Research, told MacNewsWorld. While they don't match up to the iPad or to what Samsung has done with its Android-based Galaxy Tab, "in China, Taiwan and Eastern Europe, we're finding products developed to meet the needs of their markets, mostly running Android," Orr remarked.

Expect a slew of new tablets to be demoed at the Consumer Electronics Show in Las Vegas in January. One will be a tablet running webOS, from HP, Fox News reported.

Another will be from Motorola, and it will reportedly run Android 3.0.

Android's Flaws are Good for Apple

However, fragmentation within Android could blunt its challenge.

"Today, there are several different versions of Android, and if you bought a new handset today and a new version of Android comes out 90 days later, there's no guarantee your handset will run it," Orr pointed out.

"Consumers are holding onto devices for two to three years, but device cadence is 12 months, while the operating system cadence is six months," Orr stated. "All this makes it hard to say just because you have 50 vendors and 1 million developers you could have a certain outcome."

The iAds Have It

After months of wrangling with clients over its strict control of mobile ads appearing on its iAds platform, and the departure of at least two large clients, Apple seems to have decided to listen to its customers' complaints about iAds.

Cupertino on Tuesday announced iAd Producer, an app that lets advertisers design and assemble interactive content for iAds. It also lets developers offer sophisticated JavaScript editing and debugging.

"This is going to bring more advertisers and agencies to iAds," Greg Sterling, the founding principal of Sterling Market Intelligence, told MacNewsWorld. "Other companies such as AdMob are more accessible than iAds has been and are offering similar interactive and rich media formats."

AdMob is owned by Google, which purchased it in 2009 for $750 million.

"Apple's becoming more and more pragmatic as competition across its core markets and markets into which it seeks to expand intensifies," Laura DiDio, principal at ITIC, told MacNewsWorld.

"Rather than risk losing more customers, alienating potential advertisers and sending customers into the arms of competitors, Apple wisely chose to relax its stance," DiDio opined.

Apple shares closed at $324.20 Tuesday after a day of volatile trading, up $1.99.


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