This TechCrunch article, written by David McIntosh of Redux, insists that AirPlay is not the new Apple TV. However, it starts from a flawed assumption that Apple would need to license the technology to many TV manufacturers.

The only technology Apple has really cared to license is the dock connector, and that was specifically to get an accessory ecosystem going in order to sell more devices. Integrating with TVs isn’t going to sell more devices, because the users that would buy such a television already have a device. The only immediate incentive Apple has to license the technology is to collect a hefty licensing fee, but that doesn’t amount to much.

Let’s say that licensing fee is $100 per unit (which no TV manufacturer is going to pay, but let’s give Apple the benefit of the doubt). There were 250 million television shipments last year. That’s a maximum of $24 billion per year, and we know the per-unit fee and the share of TVs using the technology would be much smaller. And with TV shipments falling year over year, that number would decrease over time. For a company that does $13 billion a month in revenue, this is quickly becoming chump change.

Another indirect incentive for Apple to license AirPlay would be to increase revenue for iTunes content. But, iTunes was always a ploy to attract people to purchasing Apple devices, not vice-versa.

I’m still of the opinion that Apple’s going to build a TV of its own and sell it to the richest consumers who already are invested in Apple’s media ecosystem.

~s

I’ve written a number of times about television. When I wrote what I thought Apple TV should have been, I thought things like a CableCARD DVR and a DVD player would be key features for me to buy it. If I could be Apple in 2011 designing a TV, I think I’d do it this way:

Industrial Design

Televisions are known for black or grey bezels with various curves, markings, buttons, LEDs, grills (for speakers) and technology brandings. Some of these are functional, while others are meant to distinguish them from the competition. I would think Apple will either borrow from the glass & white plastic bezel of iOS devices, or borrow from the brushed aluminum motif of the Cinema Display. The bezel itself will be clean; there might be one LED on it to indicate it is on, though I doubt even that. I’m guessing there will only be a power button, because you won’t need to control the device at the TV itself. Apple won’t need any branding on the device other than its own logo, and I think the rest of the design will be so clean for a TV that people won’t mistake it for anything but the Apple TV if it didn’t have that either.

Photo Frame

It used to be that people adorned their walls at home with beautiful art. Then, the television came along and ruined everything: the center of attention became a garish box rather than a piece of art. Considering the industrial design of the TV itself is likely going to be quite nice, it seems it would go to waste if it was off all the time. I could see Apple extending their iPad photo frame functionality to the television, where it automatically starts showing content while it’s on but not playing anything. Alternatively, you could manually start it by holding/touching the power button.

Inputs & Outputs

I would put four connectors on this device: power, HDMI in, HDMI out, and a network adapter. Unfortunately, no one has invented wireless power that can supply the wattage a television needs, so that one has to be there. HDMI out is an easy one: if you’re a home theater nut, you’ll want to hear the audio through your speaker setup. The network adapter is understandable for the case where wifi isn’t available or has low signal quality. Finally, when it comes to HDMI in, my logic goes like this: either you are a simple consumer that has a cable box and perhaps a DVD player, or you are a home theater nut and you have lots of components and a receiver. If you’re the former category, Apple wants to replace at least one of those boxes. For these people, Apple might automatically switch to the HDMI in signal when it detects something is on. That way, if you want to use your cable box or DVD player, you only have to turn it on and not futz with some other mechanism. If you’re in the latter category, you’ll use the receiver to switch between inputs.

Apple might throw in an IR receiver just as a throw back to people who have the old Apple remote.

Remote Control

I mentioned that there wouldn’t be any buttons on the device if I were to design it. I believe Apple will place remote command and control on iOS devices. iPhone and iPod Touch users will get a simple experience for command and control. It depends on the content service that goes along with the device, but if they provide a cable-style service, I could see a simple electronic program guide primarily driven by search. iPad users will get a better experience: a natural electronic program guide due to the device’s larger screen.

AirPlay

More importantly, Apple will recognize that discovery and consumption lie in two different places. The TV display is great for consumption, but the human interface for discovery has always been poor, especially on archaic cable boxes. Many people think Siri will be an important part of Apple TV’s value proposition, but I’m not convinced of it. Rather, Apple already has a great, reconfigurable remote control in iOS devices. iOS 5’s ability to use AirPlay wirelessly will enable Apple to create a discovery experience that leverages the TV so that the family doesn’t have to huddle around an iPhone or iPad, but the primary interaction will take place on one of those devices.

Configuration

The only reason I could see Apple making the screen a touchscreen is for configuring its networking. However, I don’t think they will do that. This article sounds very prescient. Configuration over bluetooth from an iOS device would be understandable for so many people, it makes the most sense. Alternatively, for people who use wired ethernet instead, they’ll be able to use iTunes from their computer to perform the configuration and then disconnect the cable if they desire.

Content

I honestly have no idea what Apple is going to do with content. Everyone is expecting some amazing cable-style subscription service. I have to question whether that will happen because Apple couldn’t compete on price with cable companies since the media companies are not going to be fooled into giving Apple preferential deal terms. At least, I would think they wouldn’t.

~s

In November, an article indicated that Intel was ready to open up its fabs to other chip designers.

AMD famously spun off their foundry capabilities into The Foundry Group, basically admitting that it was too expensive to maintain investments in fabrication while only manufacturing their own chips. The move also let AMD leverage competitive investments at other fabricators such as TSMC (Taiwanese Semiconductor Manufacturing Company). ARM paved the way for this kind of thinking many years ago, being one of the first fabless semiconductor companies. NVIDIA decided to go down this route as well. It’s just too expensive to maintain fabs yourself unless your volumes are absolutely massive.

There are some great reasons to have a fab, though. When making a chip, there are many factors that go into its profitability. Among them are size, power, performance, and cost of materials. Owning a fab and the process used therein enables you to optimize each of them. Intel has long held the performance crown by way of being vertically integrated, from architecture & design, down to the process used to lay transistors.

As transistors have gotten smaller, it has taken more and more ingenuity to cram more computing power into the same area. It takes a long time to research the materials science involved, and Intel has lots of proprietary technology in this area. So much that the rest of the industry feels the need to band together to compete.

When a contract semiconductor manufacturer allows others to use its process for making chips, it has to disclose lots of details to the chip designers. This is because chip designers need to simulate their chips on the process to understand nano-scale effects such as wire capacitance and impedance before sending the final designs to be manufactured.

By allowing others to build chips on their process, Intel is opening up a lot more than just a revenue stream. Of course, they realize this, and it is unlikely that they will end up making AMD’s chips. However, rumors this past week had Intel in a position to manufacture Apple’s A4 and A5. However, it is unclear to me what Intel has to gain from making ARM chips better than the other guy.

There are lots of wins to be had for Apple to use Intel’s process technology on these chips. The A5 is massive and could benefit from smaller, tighter process technologies with higher yields. With the relationship between Apple and Samsung souring, the move makes sense.

However, I think there is another move that could be even more interesting for Apple to make: buy its own fab. Apple always strives to be vertically integrated, and this would be one more step along the way to not relying on anyone else. If Apple could then build an innovative portfolio of process technologies, it would hold a yet larger lead on competitors.

When I joined Microsoft in 2003, I had done so for a few reasons.  One of them was that I believed that computing would move to devices (though I wasn't as positive about the phone being the universal computing device as I am today) and that Microsoft was the company that had the right stuff to make that happen.  Plus, it would all start from a video game console - how cool is that?

While Microsoft had its fits and starts getting into Xbox and Zune, even the first versions were great consumer experiences on their own (even if they did pale in comparison to competition).  When Microsoft entered both of these markets, it was instantly #2 on the charts.  That is not an easy place to reach.

It was last year around this time that myself and a team of people were gearing up to make one of the coolest devices ever.  About 2 months later, the courier device would be canceled.  And that, right there, was the event that made the devices story at Microsoft die.

Sure, there's Kinect and there will be future versions of Xbox, and Windows Mobile will be a profitable business some day.  But, one is hard pressed to see Microsoft expanding or enhancing the devices with which we live our daily lives.

It was unclear to me what company other than Microsoft could possibly become #2 to Apple in device categories.  However, when Steve Ballmer told us the project was being shut down, he also told us that hp had canceled the Slate.  It's snarky for me to say, but I personally believe Mark Hurd killed the Slate due to the pitiful demonstration Steve Ballmer made of it at the 2010 CES.

hp had a strategy in mind when they bought Palm.  As the number one PC manufacturer in the world facing the decline of the PC as the primary computing device, they needed to compete in mobile devices.  Dell knows this too, but has had trouble getting into the market in meaningful ways.

Mobile is hard.  Device manufacturers are clawing tooth and nail to find differentiation because margins keep eroding.  It's just like the TV industry.  When so many devices are a box with a touchscreen, what perceptible differentiation could you possibly have?  Software.  Steve Jobs always maintained that making hardware means making your own software, too.  hp realized this last year when their product resulted in a pathetic demo.

So, hp had the same choice Nokia had, only they didn't have a platform that was burning.  They've simply decided to build an ecosystem rather than join one.  The ecosystem, however, isn't a huge list of third parties - it is their own.  Two of the most important points of hp's Think Beyond event is that their devices will start working together, and that webOS will eventually make it to PCs.  As a side note, Microsoft might actually have a problem if the number one PC maker in the world decides Windows licenses just aren't worth it.

Could hp really be another Apple?  It's hard to tell.  I've heard a lot of great people left after the Palm acquisition, and hp needs to grow some muscle here first, but just like Microsoft entered the market as #2, hp will be a clear leader among the riff-raff of mobile device makers.

~s