For more than a year now people have been speculating on an apple TV. Not the plug in box but an actual display. There's lots of reason for the speculation, the fact that they have been dabbling in this space with the apple TV set top box, they sell movies and shows on itunes and it's the last phase of the "digital hub" that Steve Jobs envisioned. To me though the most compelling arguments though is that if apple is going to continue to grow it will have to enter gigantic markets. Given apple's size creating niche products won't move the revenue needle at their scale, and since no one is speculating they build cars, televisions make a lot of sense from a market size perspective. Finally, jobs said in his recent bio that he wanted a TV that was easy to use and that he "finally cracked it".
So what could apple do that would be a game changing? My prediction is that they will partner with a one or two cable providers, let you connect your apple TV directly to the coax and eliminate the cable box, cable remote, DVR, DVD, and every other setup top box. Other than power and cable it would not have ANY OTHER INPUTS. Want to play games, use your ipad. What about your DVD/Blue Ray player? Itunes.
Here's why I think this will happen.
Apple doesn't have enough content to make a device without inputs so they'll need content from somewhere, most people aren't ready to completely give up cable. I can't see an apple TV that has the same legacy connections today, since that's one of people's largest frustrations.
By partnering with 1-2 providers they can get the out of the box experience very "appley". Plug it in, turn it on sign onto itunes and your done.
Limited rollout (think iphone) will create scarcity and thus people will want what they can't have. Providers will fight to get the appletv, consumers will be asking their providers.
Cable, internet, IPTV, music, games, will all be delivered seamlessly, you won't know/care if it the content is being delivered from the cable, internet, locally recorded, or via apps.
Cable companies get to maintain the "status quo" of getting you to pay $100 and maybe more with easy subscriptions. They can deliver content in the traditional multicast way or IPTV without you having to know or care, maximizing the value of their network. Since this TV will only work on their system, you'll be locked in (again think cell phones). Possibly they could even subside the sale of the device with long contracts.
It will create a differentiation for those providers who have it. My guess is since AT&T did the iphone they'd do this deal, especially since they aren't the incumbent cable provider in most areas. DirecTV is national but seems many apple fans wouldn't/couldn't put up a dish, therefore might not be the best first choice.
One device, one remote (your iOS device), no inputs, all Apple.
I'm building a startup called ServiceVines. I live far out from civilization and like it. I get really too excited over tech, economics, and food.