 Even without a formal name, there is much speculation about Apple's forthcoming iTV device. Apple's announcement of the $299 iTV plus the launch of iTunes Movies and several new iPods, leaves us with as many questions as answers. In a recent review of iTunes Movies, TechDigs.net posed a couple questions about iTV. Now we're ready to dig a bit deeper. Read More to learn what we think are the key issues and unanswered questions about iTV. And, use the comments tell us what you think!
Apple's Strategy
What is clear from the recent announcements surrounding iTunes Store, iPods and iTV, is that Apple is focused on an overall play-it-anywhere strategy. Rather than having the handheld player with the most features or the most comprehensive store, Apple wants to provide the best overall experience. Even with digital rights management (DRM), Apple allows easy playback on Windows, Macs and iPods. It's that seamless experience and impulsive purchasing that makes what Apple does so compelling.
High Definition iTV?
 During the Apple announcement, Apple Chairman and CEO Steve Jobs stated that the video we saw on iTV was HD. We've seen the HDMI port on the back of the device confirming the capability. Now, the outstanding question is whether Apple will increase the iTunes download size to accommodate HDTV or whether the iTV device will include a video scaler to increase the 640x480 iTunes movie to a more respectable output size.
We have been noticing an increasing number products that include video scaler chip-sets from companies like Silicon Image, Silicon Optix, S3, Faroudja and more. Video scalers up-convert 480i, 480p, etc. to 720p, 1080i and 1080p resolutions, providing better quality video for non-HD content. While possible at $299, it will be tough for Apple to include high-end scalers since most find their way into devices that are $500 and up -- in some cases way up. What does it all mean? Well, if Apple does include a good scaler, it could mean that they'll continue to sell movies that are 1.3GB (for two hours), and up-convert them to get closer to HD-quality. If Apple does not include a decent scaler, then we can plan on the iTunes Store increasing movie size substantially (3GB+) in order to offer better quality.
Should Apple choose to increase movie size, there's the unanswered question of whether any movies purchased today will be upgraded for free. Based on Apple's handling of TV shows from the old iTunes Store resolution up to the new 640x480, our expectation is that we would have to re-purchase the higher resolution movie. That would be unfortunate. But based on Apple's 125,000 movie sales during the first week, it's not clear that such logic will put a damper on impulsive iTunes purchases. It's our hope that Apple will employ a high-end scaler and increase movie quality (and therefore size) over time.
iTV Hard Disk
This week during a Goldman Sachs conference, Disney CEO Bob Iger said that the iTV device includes a small hard drive. What this means for users is unclear. Will we be able to purchase movies directly from iTunes without a computer? Is this hard drive designed primarily as a caching device to assure smooth playback on slower networks? Will the iTV be able to play movies stored both locally and on other volumes on a network? Currently, all we can do is speculate. The hard drive is a good idea. Without it, use of iTV on many of today's wireless and wired networks would be a poor experience.
iTV DRM
Apple DRM allows users to play movies back on a maximum of five iTunes installations (Windows or Mac computers). It's unclear whether iTV will count as another playback device in the five-computer limit that currently exists at the iTunes Store. It's not a big issue, but I'm sure many people are already at the maximum of five installations -- most coming from OS reinstalls as opposed to five concurrent machines. The good news is that Apple allows you to set this back to zero once every year.
Non-iTunes Store Content
Most iTunes music libraries include primarily non-DRM music ripped from CDs, and a much smaller portion dedicated to music purchased at the iTunes Store. In contrast, most iTunes video libraries include mainly content from the iTunes Music Store. This is due primarily to the complexity and legalities of getting movies and other content from DVDs, etc., to iTunes. It's unclear how this will change with iTV. While we know that it's highly unlikely that Apple will support DRM-based PlaysForSure (or Microsoft's DRM du jour) video, we hope that Apple will at minimum support standards-based content for non-iTunes video inside of iTV -- just like it does with iTunes. Now that Google CEO Eric Schmidt is on Apple's Board, there has been much speculation on whether we're likely to see the iTV gain access to Google Video content. I'm not sure how interested people will be in seeing the Star Wars Light Saber Kid or Hamster Wheel Gone Wrong on a 60" HDTV, but who knows -- I've been wrong about that sort of thing before. To be fair to Google, they have been increasing their content beyond user-submitted fare.
Rentals
A glaring omission from Apple's announcement is an iTunes movie rental option. Movies are not like music. A majority are a one-time or maybe two-time experience. Despite the fact that DVDs caused us all to buy movies at an unprecedented rate, the movie rental and pay-per-view business continues to exceeds movie purchasing. There are certainly movies I want to own, and my DVD library of nearly 800 movies reflects that compulsion, however, most of the movies we watch are not worth owning. So unless Apple can provide a $3 (or less) per-movie option, I question whether Apple can grow their movie business like it has their music business; and therefore whether any of us will be willing to spend $299 on a device that won't play rental content. As the fog around these unanswered questions begins to lift, we'll highlight it here on TechDigs.net.
Tell us what you think in the comments area below.
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