Blog & Company News

Aug 24, 2012

Tech News: Is Apple TV Challenging the Xbox for the Living Room?

According to Apple, Apple TV is only a "hobby", and it is aimed at your family room. Yet this is one place that device manufacturers are focusing on for the future. This is an area that Microsoft has set its sights on since 2001 with the introduction of the original Xbox. But this past quarter something interesting happened - Apple's "hobby" has over taken the Microsoft Xbox in sales. Apple TV sold 1.3 million units during the second quarter, a bump of 170% from the previous year.[1] In the same quarter, Microsoft sold only 1.1 million Xbox consoles.[2] The bottom line - for the first time, Apple's "hobby" has outsold Microsoft's bid for the living room. Xbox Dominance Since launching the original Xbox in 2001, Microsoft has been fighting for a presence in the living room. At first the competition was clearly defined - Microsoft needed to establish its dominance in relationship to Sony's PlayStation. Fast forward to 2012, and Microsoft is in a comfortable position in relationship to the living room. The Xbox 360 continues to bring more media and entertainment options with each update as Xbox users enjoy such features as Netflix and HBO. History Repeating? But if we were to take a look back at Apple's success it would seem that the home entertainment market is ripe for the picking. As the music and smartphone markets before, Apple brings a device to the market that is backed with an entire infrastructure. Just as the iPod entered the market with the support of iTunes and music distribution deals, Apple TV has again iTunes and media distribution deals. You can say that the Apple TV comes with a built in market, but there is another part of the infrastructure that may be the driving force behind Apple's "hobby". The iOS Connection If there is any functionality that makes the Apple TV stand out from the crowd, it is the capability of AirPlay. With that added function, Apple is bringing the iPhone, iPad, and iPod Touch into the living room. To state it another way, Apple has found a way to tie millions and millions of its products to its home hub. Naturally, using the HDTV screen as an upgrade to the device screen is a nice touch. Through AirPlay, the user can share HD videos with numerous users without having to download them. And with the convenience of Photo Stream, the pictures you take on your trip will beat you back to the living room. Then there is the factor of cost per title. Comparable games can be found for much cheaper on the iOS / Apple TV paradigm than for the Xbox, and these are not just knockoff games. In fact, many are now being written to specifically take advantage of the AirPlay mechanics. For example, Real Racing 2 will use the iOS screen for secondary data while the action is taking place on the big screen. In fact, the iOS / Apple TV compares well with the upcoming Wii U in several ways - take tablet control and remote information screens, for starters. As it stands, Microsoft is still very much in the dominant position when it comes to a living room presence, with over 67 million Xbox consoles having been sold.[3] And it is difficult to foresee a trend in a single quarter result. But perhaps Microsoft should spend a little time looking over its shoulder as it races to the living room - another competitor may be closer than they think.
[1] Apple Sold 1.3 Million Apple TVs In June Quarter [2] Microsoft Reports Record Fourth-Quarter and Full-Year Revenue [3] Xbox 360 Has Generated More Than $56 Billion In Retail