The new Apple TV is an impressive device that is much smaller than its predecessor and only streams content, instead of playing from an internal hard drive. Whether you like the new device or not, it’s important to remember that this is the first step in Apple’s television strategy. Steve Jobs has been very clear in the past, saying that a lot has to change in the television market before Apple would consider it anything more than a hobby. One of those changes happened yesterday.
A $99 price point on the Apple TV will give Apple exactly what it needs — a lot of users.
Look at it like this — Apple is able to negotiate with the music studios because it comes from a position of power. The iPod is the top selling device in the world, the iPhone is selling like hotcakes and everyone wants to be part of it.
That’s not the case with the Apple TV. I’m sure it sells quite well, but it doesn’t have the mass market appeal that the iPod, iPhone, and iPad have. That doesn’t give Apple much bargaining power when they go to the studios and want to offer things like rentals.
If Apple can get the Apple TV out to the mainstream market and make it as popular for the home entertainment system as the iPod is for music fans, its position will strengthen.
In order for Apple to offer services like the long rumored subscription model for television shows, they have to show the networks that they have more than a hobby device. The networks are not going to want to do anything to upset the status quo, unless there is something big on the other side for them.
Apple TV can easily be that big thing, but it is going to take some time. Typically, when Apple sets it mind to making something a hit and they have a target to achieve, they make it work. I have no reason to think this will be any different.