Overlooked in the iPhone hype

Well, it finally happened: Apple unveiled what had long been rumoured to be in the works, a true Apple phone (in contrast with the ROKR, the product of that half-hearted collaboration with Motorola last year). And while I wouldn't say that all the excitement about the Apple iPhone over the past week is completely unwarranted, I do believe that Apple's strongest bid for consumers' dollars went by largely unnoticed.

I've been having a lot of discussions about the iPhone, and it seems like everyone has a different take on what it means for Apple strategically, both now and in the future. And it's fun to speculate on where it's all going, but I'm much more interested in another product that Apple introduced last Monday: the Apple TV.

By most accounts, the Apple TV's introduction was underwhelming. Despite the buzz it created last September when Steve Jobs uncharacteristically introduced a product that was not yet ready for market, this time around it was largely overshadowed by the iPhone. And it really did feel like even Apple wanted to downplay this product. The specs were nothing to get excited about: a mere 40Gb hard drive and support for up to 720p video. Right now, its abilities are pretty much limited to streaming media from up to five household computers and displaying it on a television screen.

But should we expect it to end there? No way.

Back in the fall of 2004, in the context of an introductory marketing class at Notre Dame, I did some research on what could lie ahead for Apple. The result of this research was what I then called the iCore. It was a nondescript grey box equipped with massive onboard storage capacity, wireless capability, and the requisite connectors (phone, cable, internet) to become a sort of central hub through which all household communications flowed. It would be a base station for phone lines, for cable television and for the internet, and through wireless transmission, could enable a host of appliances throughout the home. Media could be shared from a PC to a television, phone calls could be routed through the internet, and recipes could be fetched from the internet and displayed on the microwave oven door, all through this central hub and a simple, ubiquitous interface.

And because Apple was the only company with expertise in both hardware and software, it would be the only one to be able to offer a fully integrated solution, while all others would have to rely on partnerships.

So what is the Apple TV capable of right now, and what could it possibly enable in the future? More importantly, why would Apple choose to release such an uninspiring product now if its true promise lies in the future? The answer, I believe, has to do with something Steve Jobs himself said: that, given enough intrinsic flexibility, a product can remain relevant through upgrades rather than overhauls. The Apple TV, as introduced last week, already features HDMI, component video/audio and ethernet connectivity, though the latter isn't explicitly useful in its current incarnation.

One of the strongest arguments in favour of the touchscreen for the iPhone was that, by avoiding a physical interface (like a multi-function keyboard), the iPhone could perform any task imaginable, because it was all just a matter of displaying an appropriate interface. Every function of the phone could have its own custom interface without being wedded to a multi-function keyboard.

Similarly, the Apple TV can stake a claim in users' homes immediately, and when the dynamics of the converged marketplace change sufficiently (as they will), the full breadth of its capabilities will becomes obvious. Oh, and you can bet that by then Apple will have the 'better' and 'best' versions of the Apple TV on store shelves, possibly offering integration with the iPhone, for instance.

In this respect, the Apple TV is truly a Trojan horse. It is Apple's claim to the home media market, and in iTunes, it has the perfect unifying vehicle to tie all of its wonderful products together. Software, hardware, design, and flawless execution. Can anyone else do that? Not likely.

So for now, the Apple TV will be content to be an unassuming box with unassuming abilities. But the future sure looks promising.

Nic