Apple's Way to The Living Room

By David Needle

January 19, 2007

The company's digital strategy includes a 'hip quotient' that might be enough to put it in the lead.

How is Apple's QuickTime media software like an offensive tackle in football? It's like the tackle who makes it possible for the star running back to make big gains.

Apple is using QuickTime to fast-track its way to your living room, and it's pushing support of the emerging MPEG 4  standard, which is partly based on the player, to get there.

QuickTime helped Apple get the word out about its blockbuster iPhone announcement last week at Macworld Expo, with over 2.2 million users streaming Steve Jobs' keynote from the Apple Web site. And that was just in the first 24 hours. Another million per day tuned in to watch the next five days. Frank Casanova, senior director of Mac OS X audio and video technologies at Apple, would tell you the company delivered a television-sized audience.

Apple  is also delivering big numbers with its iTunes music store. And there's QuickTime again, which has made the upwards of 2 billion iTunes downloads possible. Casanova told internetnews.com that there have been over 500 million downloads of the latest version of the QuickTime 7 player in the past two years.

But despite the numbers, the biggest players by market share are Adobe's Flash and Microsoft's Media Player, with Flash taking 97 percent of the user-generated market in 2006, according to Accustream Research. QuickTime had 2 percent and Windows 1 percent.

At "branded" Web sites -- everything from media company ABC to Yahoo -- Accustream said that during the first half of 2006, 51 percent used Windows Media Player to download content; 21.9 percent used Flash; 11 percent used AOL's Media Player; 9.3 percent used Real Networks; and 2.2 percent used QuickTime.

With the various players costing nothing, users have a choice in what they can use, and switching among multiple players doesn't seem to be a big issue.

"As long as those companies exist, the different players will be popular with different segments of the market," Paul Palumbo, research director at Accustream, told internetnews.com.

This is where the home comes in.

"Apple is going for the jugular," Phil Leigh, analyst with Inside Digital Media, told internetnews.com. "They've clearly dominated the legitimate music download space, and Apple TV has the potential to establish QuickTime as a standard in the home."

Apple has described Apple TV as the DVD player for the 21st century. The device connects PCs and Macs wirelessly to televisions making it easy to play what's on your computer, or what you can download from the Internet, in the living room.

It's not a new or unique capability, but Apple's legendary ability to simplify traditionally geeky tasks, such as getting PC content onto your TV, is what it hopes will make Apple TV stand out.

"I think in 2006 everyone became aware that Internet video was here to stay," said Leigh. "In 2007 people are asking 'Why can't I see that content on my TV?'"

Leigh thinks Apple TV will be the first product that matters for getting digital content in the living room. For example, Apple TV users will automatically have access to movies they purchase and download to their computers.

And unlike the PC world, Leigh thinks consumers won't stand for multiple formats on their televisions. "Consumers don't want to fool around picking formats; they just want it to play. QuickTime supports MPEG 4, the H.264 standard the TV industry understands."

Gartner analyst Mike McGuire credits Apple for its smart investment in building the quality of QuickTime via movie trailers on the Web and other sources.

"Apple's put itself in front of a lot of folks," McGuire told internetnews.com. "Other [media players] may have more installs, and in terms of what's driving the market, all the other players have their role. But as far as momentum, a lot of it is with Apple, and the 'hip' quotient is in its favor.

"It will be interesting to see how Microsoft  reacts over time," added McGuire, "because Microsoft wants the living room as badly as Apple does."



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