The Small Wave.

There've been more rumors lately about an upcoming Apple television set, with one article going so far as to call it inevitable. But in watching Steve Jobs at the D8 Conference last June I think the question was already asked and answered. 

Below is an exchange between a conference attendee (Dan Simpkins, CEO of Hillcrest Labs) and Jobs. Jobs does a good job explaining the fundamental reason it's hard to innovate in the television space. One can sense a certain resignation in Jobs' answers that signify, to me at least, he knows Apple can make better use of their resources than to try to break into such an ingrained system. 

Jobs' remarks indicate that Apple will continue to dabble in the set top box approach, improving it as they go, but that an iPhone-like breakthrough TV is not possible in the current television market. 

Simpkins:

"A topic that was noticeably absent tonight in your talk was television. And you talked about how to make the iPad and the iPhone you need to throw out the human interface in order to really make those products interactive. Do you think it’s time to throw out the interface for television—the classic up, down, left, right—and bring in a new human interface to make television truly interactive and, if so, when is Apple gonna do something in that arena?"

Jobs:

"The problem with the television market— the problem with innovation in the television industry is the go to market strategy. The television industry fundamentally has a subsidized business model that gives everybody a set top box for free—or for $10 a month—and that pretty much squashes any opportunity for innovation because nobody’s willing to buy a set top box. Ask Tivo, ask Replay TV, you know, ask Roku, ask VooDoo, ask us, ask Google in a few months.

"So, all you can do—Sony’s tried as well, Panasonic’s tried, a lot of people have tried, they’ve all failed—so all you can do is add a box onto the TV system. You can say, well, gosh, I noticed my HDTV has a bunch of HDMI ports on it, one of them is coming from the set top box, so I’ll just add another little box with another one. Well, you just end up with a table full of remotes, cluster full of boxes, bunch of different UIs, and that’s the situation we have today. The only way that’s ever gonna change is if you can really go back to square one, and tear up the set top box, and re-design it from scratch, with a consistent UI across all these different functions, and get it to the consumer in a way that they’re willing to pay for it. And right now there’s no way to do that. 

"So that’s the problem with the TV market. You know, we decided what product do we want the most, a better TV or a better phone? Well, the phone won out, but there was no chance to do a better TV ‘cause there’s no way to get it to market. What do we want more, a tablet or a better TV? Well, probably a tablet, but it doesn’t matter because if we wanted a better TV there’s no way to get it to market. The TV’s gonna lose until there’s a better—until there is a viable—go to market strategy. Otherwise you’re just making another Tivo. Does that make sense to you?"

Simpkins:

"Yeah, absolutely."

Jobs:

"That’s the fundamental problem. It’s not a problem of technology, it’s not a problem of vision, it’s a fundamental go to market problem."

Simpkins:

"But obviously, in the phone area, you were able to recreate that go to market strategy by working with a carrier. So does it make sense to partner with a cable operator to—"

Jobs:

"Well then you run into another problem, which is there isn’t a cable operator that’s national. There’s a bunch of cable operators. And then, it’s not like there’s a GSM standard where you build a phone for the US and it also works in all these other countries. No, every single country has different standards, different government approvals, it’s very, um… balkanized. So, I’m sure smarter people than us will figure this out, but that’s why when we say Apple TV is a hobby, that’s why we use that phrase."