Navigating the new TV landscape

Connected TVs Apple may be getting ready to license its AirPlay streaming software to other CE makers to embed in their HDTVs, according to a report this week by Bloomberg . Though the report did not identify the potential hardware partners, “two people familiar with the program” said AirPlay-enabled devices could be available before the end of the year.

If the report proves true, users of thirds-party AirPlay-enabled TVs would be able to stream video content over their home wireless network from the iPad, iPhone or iPod Touch for display on the big screen. Currently, video streaming from Apple portable devices is only possible via an Apple TV set-top box. Under the proposed plan, no separate set-top hardware would be required.

Having no direct (or even indirect) knowledge of whether such discussions are actually underway, I’d be surprised if they weren’t. Apple’s current living-room strategy remains half-baked. Though it has sold a little over 1 million Apple TV STBs,  peddling $99 boxes isn’t really going to move the needle very much for Apple, even at substantially higher volumes. While Apple has recently moved aggressively to more directly monetize its App Store platform, which might boost the revenue potential of Apple TV, Apple is yet to enable the App Store on the set-top box.

One reason it hasn’t, I suspect is that TV navigation still sucks. It is very hard to implement really creative apps on a TV using the navigation functions available on a standard TV remote. Paging through a large collection of apps using arrow keys isn’t a lot of fun, either. For Apple to do more than simply me-too what Samsung, LG and any number of other CE makers are already doing by embedding app stores in their TV sets it needs to solve the 10-foot navigation problem.

Like the cable and satellite operators who have rushed to create TV remote apps for the iPad/iPhone, Apple has figured out that a handheld multitouch device makes for a far-superior navigation interface for any sort of advanced TV functionality than a standard remote, including the minimalist Apple TV remote. But there’s no reason Apple has to limit itself to navigating the offerings on existing cable services. Using the processing power and graphics capability available on the iPad 2 (and presumably later iterations), programmers and developers could create rich, computation-intensive multitouch apps that could run on the iPad but displayed on the big screen — the type of apps that could not be duplicated on a typical cable box or on most of the connected TVs or Roku-type boxes being marketed today.

Even better for Apple, there are already tens of millions of multitouch Apple devices in consumers hands, including more than 15 million iPads. Making every iPad owner go out and buy an Apple TV device as well, however, in order to take full advantage of the tablet’s capabilities as an interactive video retrieval/social/personalization/sharing device, however, is obviously not a very efficient way for Apple to leverage the vast iOS universe it commands.

Licensing the AirPlay streaming software to other OEMs would be a force-multiplier for Apple, without requiring it to license any of its core iOS technology. Bringing more of the huge iOS user base to bear might give Apple a path to outflanking the incumbent service providers, providing the missing “go-to-market strategy” Steve Jobs identified last year as the biggest hurdle to a successful TV strategy.

Time to market may also be a more pressing concern for Apple than it was a year ago. While Apple looks for ways to leverage its iOS universe in the living room, Microsoft has struck gold there with its Kinect gesture-based control technology for the Xbox 360 game console. Like Apple’s multitouch iOS devices, Kinect could allow Microsoft to provide TV viewers a powerful new tool for rich on-screen navigation beyond its current use as a gaming controller, should Microsoft choose to pursue a more TV-centric strategy.

There are signs that it has. Last week, Microsoft moved Tom Gibbons, a “hardware guy,” from its mobile group, where he led the development of the hardware reference standard for Windows Phone 7 over to its TV & Services business, where he’ll be responsible for “driving subscriptions, usage and global partnerships.” His new corporate bio describes him as “Experienced in hardware, software and consumer product development.”

Some are reading his new assignment as an indication that Microsoft is readying a new assault on web-connected TVs and set-tops using the Windows Embedded OS it might be better served figuring out how to turn Kinect into an embeddable middleware that could run on multiple connected-TV platforms (including Android) and power new, gesture-based UIs and navigation capabilities.

That, too, would be a good job for a “hardware guy.”

Further reading:

Apple’s Path to the Living Room ($$)

AirPlay demo