Apple Brings TV Marketing Into Focus

Not much has been done to market Apple TV since it began shipping in March. That's about to change, according to analysts who say the Cupertino, Calif. company now wants consumers to view the box as the entertainment center of the living room. And it all starts with price.

On Tuesday at the Macworld Conference & Expo in San Francisco's Moscone Center, Apple CEO Steve Jobs took the wraps off a less expensive device intended to bring digital video from the PC onto the TV screen.

Still called Apple TV, the tech gadget marketed to consumers for the living room now costs about $70 less than the original price at $229. The selling point is content, with hundreds of high-definition (HD) movies and television shows that consumers can rent or buy directly from their TV screens.

Apple also unveiled an Internet movie rental service that highlights agreements with the top six studios. The service now includes content from Disney, Fox, Lions Gate, Miramax, MGM, New Line, Paramount, Sony, Universal, and Touchstone.



Trip Chowdhry, senior analyst at Global Equities Research, believes that marketing the combination of DS2--a 200 Mbps Powerline technology--along with the agreements with multiple studios for HD movie rental content will create demand for Apple TV. "Apple's focus on marketing the tech features and media services will make Apple TV successful," he says. "Nearly the entire Macworld keynote was dedicated to Apple TV."

Software upgrades and easily accessible HD media makes the content on Apple TV look similar to a television channel, says Andy Hargreaves, senior research analyst at Pacific Crest Securities. "It makes you think about how we're going to consume video in the future, which could become very competitive with the way cable companies deliver their services," he says. "I expect Apple will market Apple TV based on the HD content and ease of use."

Apple TV doesn't offer broadcast content, which gives cable companies a solid footing in set-top box services, at least in the near term. Hargreaves says that is unless Apple decides to build in a cable card slot that relies on tru2way. The technology, formally known as Open Cable Application Platform, or OCAP, would enable consumers to receive a broadcast signal through Apple's box.

Although impressively thin at just 0.76-inch at its thickest point and 0.16-inch at its thinnest, analysts view the MacBook Air as a marketing afterthought. Analysts expect Apple to market the $1,800 notebook to mobile users as an entry point into lightweight portable laptops, introducing the $3,000 solid-state drive version for those willing to plunk down more.

The laptop experience has been improved without adding weight. And although the new device has Wi-Fi connectivity, it lacks a cellular modem--which is clearly worth mentioning because most road warriors look for this feature.

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