Apple TV to get long-anticipated upgrade?

For several years, Apple TV has been a mediocre product from a company that rarely accepts mediocrity. Left in the dust by a number of internet video-to-TV devices like Roku and even Microsoft’s Xbox 360, Apple’s offering has remained the same for a year and a half — and is more expensive to boot — $229 compared to Roku’s $99. But today, Piper Jaffray analyst Gene Munster very publicly predicted that Apple TV will get a software and hardware upgrade very soon.
In a note to clients, Munster said he believes Apple will integrate its TV product with iTunes, offering a subscription service priced at $30 to $40 a month for all-you-can watch television entertainment (much lower than an average monthly cable bill of $85 a month). Even more exciting, he says the company will probably introduce new hardware that can not only pick up a live TV signal, but also has DVR programming and can sync with a host of other Apple products like iPods, iPhones and Macs. This would place Apple in direct competition with cable companies and other television hardware sellers.
This second forecasted move would be even more interesting, considering that both Hewlett-Packard and Dell have tried their hand at selling LCD television sets only to see lackluster sales. Whether Apple will find better reception remains to be seen. Perhaps its ability to mix gaming — popularized on the iPhone and iPod Touch — with this new platform would make a difference.
Munster cited several key pieces of evidence as basis for his predictions. First, Apple chief operating officer Tim Cook stated just last month that the company would continue to sink money into Apple TV because it believes “there is something there for us in the future.” Apple has also maintained patents dealing with digital video recording and has teamed up with LG in a five-year, $500 million deal to produce LCD screens (the big hint toward a hardware change).
Some analysts say Apple will remain on the margins of the TV business because prices are still so low. But, as CNN Money points out, the same was true of the mobile phone market before Apple’s blockbuster launch of the iPhone. And it’s not like Apple TV isn’t selling at all these days — Munster’s note says the company will probably sell 6.6 million of the devices in 2009 alone, up from 2.1 million sold last year.
This is not the first time Munster has aired opinions on Apple TV. He first predicted an upgrade to the product back in June, focusing on the integration of the App Store and the dual use of iPhones and iPod Touches as controllers for games played on the new and improved hardware. That said, he suggested that these developments would be at least partially unveiled at the company’s developer conference, which of course never happened.
For now, Munster’s predictions merely make sense — allowing Apple to trounce its competition in the TV space, extend its reach into the gaming space and tie its products into a unified entertainment complex in one fell swoop — but there’s no telling when such an announcement from the company itself will take place.