Apple TV Now

Apple refreshed its current Apple TV service last September, launching a $99 hockey-puck style box with basic Netflix streaming. While it sold better than the initial iteration of the product, it’s still a hobbyist toy. Apple hasn’t killed it, so it might as well improve on it. Read on to find out how.

Apple’s iCloud Web storage service covers photos and music for now. But the big, gaping hole everyone took stock of when Apple CEO Steve Jobs unveiled iCloud earlier this month was that there were no provisions for movie and TV content. This an area both Google and Amazon have addressed with their media storage services. Google TV in fact is becoming a larger palette for YouTube content, which now includes movies. With its own TV sets, Apple would have a solid delivery mechanism with which to deliver Netflix or other content to the consumer masses. Munster said Apple could then easily add movies and TV shows for purchase or rent via iTunes and iCloud.

One theory on why Google TV has failed to attract significant interest beyond early adopters is that people are already streaming Netflix or Amazon from computers. Google TV adds the Chrome Web browser to that equation, but there aren’t many Google TV apps that have consumers knocking down the door to use the service. Google expects to launch a Google TV developer kit for Android this summer.

Let’s transplant the Google TV plans to Apple, whose App Store has defined what a mobile app store should be to consumers. In three years, Apple has sold more than 200 million iOS devices with 425,000-plus apps to offer users and added more than 225 million iTunes accounts with credit cards. The company moved 25 million iPads in 14 months. “Apple’s strong iOS developer community would likely jump at the chance to build apps for an Apple Television and Apple’s iOS users would likely jump at the chance to buy one,” Munster argued in his research note. If there is one thing Apple has nailed in mobile, it’s the app experience.

Apple will take baby steps toward pairing its App Store with a full-fledged TV, opening its App Store up to developers on Apple TV, following the resident YouTube, Netflix and MLB. Munster believes Apple may open the Apple TV up to third-party developers and launch an Apple TV App Store within the next year. “The final step would be bringing the Apple TV software and the App Store to an Apple Television. Apple’s expertise in software and apps would be a strong differentiator for the company in the television market,” Munster said.

There are signs Apple has such plans in mind. Apple has lodged patents for advanced TV broadcast menus that could be used in “a display with built-in functionality (e.g, a television),” according to Patently Apple.

Munster said Apple has struck a component deal in which it could secure up to 50-inch LCD displays, which “bolsters our confidence that the company remains serious about the connected living room.”

Munster said that of the 220 million flat-panel TVs sold in 2012, 48 percent will be Web-enabled, of which Apple could sell 1.4 million units. An Apple television could add $2.5 billion to Apple’s revenue in 2012, or roughly the same amount the company paid out to iOS developers to date. Further out, Apple television sales could balloon to nearly $4 billion in 2013 and $6 billion in 2014. That’s reason enough to try such a venture.

Google TV as we mentioned has struggled to gain traction. Apple could add another feather in its ecosystem cap by launching an Apple TV with a full Safari browser and App Store to show Google how it’s done … just as it has blazed the trail in the smartphone and tablet markets with the iPhone and iPad, respectively. This would certainly give Jobs some measure of satisfaction and revenge versus Google.