Experience Trumps Features

Steve Jobs was quoted saying the following at the launch of iPad2 earlier this week:

Apple’s pushing it as a giant leap forward. That’s it for the video. Again, this is the intersection between technology and liberal arts. It’s in Apple’s DNA that technology is not enough. Hardware and software need to work together. Nowhere more true than in the post-PC market. Competitors describe tablets like PCs, with specs and the like, but the iPad shows that it’s all about the intertwined software and hardware. They need to be easier to use and more intuitive than PCs. Jobs thinks that they’re going to be competitive.

This really goes to the heart of how different Apple is from Google. Let me give you some evidence, Google on its GoogleTV effort announced an interesting set of features in the September/October 2010 timeframe – you can read about them here. Of specific interest is the one about “Fling”:

Fling a video to your television

Find a great website on your phone and want to show it to everyone? Now you can. “Fling” what you’re watching, listening to, or doing on your phone by sending it to your TV with the press of a button.

It received feedback and coverage, and NPD’s Ross Rubin tweeted about it as well:

Looks like Google TV’s ‘Fling’ feature will be its counterpart to Apple TV’s AirPlay.

The reality is far from it – and not because the feature does NOT exist but because the experience is tedious. A great consumer experience removes the challenge, removes the complication… In order to “Fling” a page or a video to the TV from an Android phone – you have to “Share”. Yes “Share” – there is no simple press of a button. On the Browser bring up the “Menu” (1), select “Share” (2), and then select “Google TV Application” (and that’s 3). The idea that it can ‘flung’ is not intuitive, you don’t know anything about it.

Contrast that with Apple’s Airplay, a nice icon shows up in a Media Player (with IOS 4.3 supposedly AirPlay will become available to third party apps as well) – tap the Icon, and select the TV/Device to ‘airplay’ to. The context is within the application and it is not being called share.

Now, purely technically, can Google implementation improve – absolutely yes. The key difference is that they release features with plenty room for consumer experience optimization.

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Notes:

1. Snapstick with meager resources gets it (check out how they “snap” the video to the large TV) BUT to be fair – you need to use their app, and their box connected to the TV

2. Business Insider’s Dan Frommer in a blog post today shows that GoogleTV-based Logitech Revue is ranked #563 compared to AppleTV at #10 on Amazon’s Best Selling Electronics.

 

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Boxee Business Model & Box Subsidy

The article on Electronista had me thinking on Boxee’s business model. Triangulating the recent announcements on Boxee being integrated by Viewsonic &  Iomega and the aforementioned article – is Boxee looking to make money by selling boxes (or licensing revenue per box?)  Boxee needs a large deployed base something that Roku has achieved (over 1 million devices, 1 billion streams and counting) in order to have a profitable business especially if they are targeting subscription fees as reported in blog posts from early 2010.

Whether Boxee implements a subscription fee or not, scale is critical**. And hence a affordable box**. Subsidizing the box is tricky especially if Boxee is not manufacturing the box itself – it will introduce two levels of overhead – one by the ODM who is manufacturing the box (e.g. in China or Taiwan) – and second by device maker such as D-Link. Simply speaking both entities need to make money. Now Boxee could hire & staff to have a team work with an ODM directly … so those costs need to be factored in to the business model.

Needless to say the amount to be subsidized is critical which is directly proportional to the cost of goods, cost of the box. The current Boxee box by D-Link retails at $199 compared to the retails cost of Apple TV at $99. Comparing Boxee box to Apple TV is probably not right, in the case of Apple TV – they are balancing cost with feature set – for example Flash 10.x is not supported by AppleTV (which does put requirements both technical and cost on the hardware to be used). Plus Apple is vertically integrated – it is their chip (A4), and they are getting it manufactured at the most optimized costing (evidence of optimized costing and supply is evident in their recent quarterly earnings conference call where they disclosed that they are using cash to secure inventory, an excellent analysis done by Asymco can be found here).

It makes more sense to compare Boxee box with products from Roku and WD. Roku has currently three products, all probably based on chips from Trident (technically from  NXP, whose STB assets were acquired by Trident) – Roku HD (MSRP $59.99), Roku XD (MSRP $79.99), and Roku XD | S (MSRP $99.99). Western Digital (WD) has three products as well – WD TV Live, WD TV Live Plus, and WD TV Live Hub. The last one from WD, the TV Hub, includes a 1TB Hard Drive [this is also competitive to the Iomega with Boxee]. There is no difference in the MSRP for TV Live and TV Live Plus at $129.99 (actually as of this writing, the TV Live Plus is at a promo pricing of $119.99 on the WD website). The TV Live Hub has a MSRP of $199.

The boxes from Roku and WD both are capable of 1080p playback, in fact, in my personal experience the WD Live TV plus does a fantastic job of 1080p and 720p playback of many formats. Boxee switched from Nvidia to Intel and the reason cited was 1080p playback. And agreed there are several nuances to the flavors, bit-rates of HD – making the selection of main processor harder. I think Boxee failed to implement the MVP concept for the Boxee Box***  or the Jobsian product philosophy of what not to do. Roku introduced an absolutely no-frills box when they started out with only support for Netflix. I suspect though, it was support for Adobe Flash that made them switch to Intel and now switching to another platform would be difficult as indirectly admitted by Boxee’s CEO Avner Ronen on this blog post:

“Having both Boxee-based devices running the same system-on-chip is also making life simpler for us, since we can develop virtually identical firmware for both.”

Boxee, it appears is trying to be everything to everybody but in implementation it is falling in the segment of “Early Adopter, High Tech Enthusiast and requires a PhD”.  Take a look at their forums the diversity of requests being made is mind blowing. I believe Boxee team is occupied with features and functions more than benefits.  They have taken on a task in equivalence to what the GoogleTV is trying to accomplish without the resources.

There is no doubt that Boxee needs to reduce cost of Boxee-enabled boxes being deployed by its partners – and in order to do that, they need to drive cost by focusing on the most important features. May be do a re-start of their product? The very first thing to do is to with right feature set the right System on Chip (SOC). It is not just the SOC pricing, but the implications (and hence the cost) on the rest of the box design.

Secondly the subsidy flow has to be thought through, I believe it may be an opportunity for Boxee to flip subsidy model on its head. Traditional subsidies are complex, or at least complex to operationally manage. Take the example of cable companies such as Comcast or Time Warner – they source their Set Top Boxes (STBs) from the likes of Pace, Motorola, Samsung, Cisco. However the consumer pay nothing for these boxes. The STBs are subsidized in lieu of monthly consumer revenue. And there is a system in place to handle it on the company accounting books.

Boxee has a wonderful technology, and beginnings of a great platform. It is, however, a very crowded market. May be Boxee needs to enable their technology to be a platform for non-Video services in the Digital Connected Home?

** GigaOm’s Om has an excellent post on what makes an Consumer Internet company successful – and all three factors are important for Boxee.

***I argue that the Software only version and the Box implementation are two fundamentally different products. The Boxee Software Only model is similar to Microsoft Windows, and the Boxee Box to a significant degree following an Apple product model.

New Apple TV: The Bottom Line

I received my new AppleTV a couple of days ago – check out the un-boxing images on Flickr. The really amazing thing about the new AppleTV is its size – it is really small! You can read several reviews on many, many tech blogs on the Apple TV, I have tried to look deeper into what they have to offer and the implications. Here are my thoughts:

 

Trade Off: Seamless Experience vs. Locked Up Eco-System

 

The most annoying thing with the new AppleTV is that before I can stream any content from any PC – I need to have iTunes installed, and not just that, you need to have Home Sharing turned on (to be fair the old AppleTV also needed iTunes). And the puzzling thing is that if you have more than 5 PCs and Macs – good luck – you won’t be able to share everything. Beyond annoying, I think, this is where the Apple eco-system is getting tightly locked down.

 

Heck, you won’t be able to use your iPad or iPhone or iTouch Remote Control App if home sharing is not turned on. The experience is seamless once Home Sharing is turned on – any Apple Device will discover the content and the device that is being home shared.

 

There is a downside to the above – you cannot experience any content that is stored on UPnP/DLNA device – rule out streaming content from devices such as WDC My Book World, Windows XP/Vista/7 etc.

 

More importantly – everything being tied to Apple is going to own tremendous consumption behavioral data moving forward. However the thing is that iTunes is widely accepted and consumers owning Apple devices are attuned to using iTunes.

 

Oh and add to it another major annoyance – because it is streaming only box – if you have the PC and Mac turned off, no content can be streamed home sharing or not!

 

Airplay: A new de-facto standard in Content Sharing?

 

While certainly Airplay is not just an AppleTV feature, the combination of the two is going to be very powerful. I tried Airplay between my iPad running iOS 4.x Developer build and the new AppleTV. I was able to select and stream the audio from both the YouTube and the iPod app on my iPad to the AppleTV. I was unable to stream the YouTube video the AppleTV – I am not sure if this is not supported yet or it was something that I missed (in that case can it be attributed to a ‘design’ failure on Apple’s part?).

 

Airplay requires Home Sharing as described above to be turned on. 9TO5Mac claimed Airplay to be a ‘Flash’ killer. It is going to be a serious threat to any entity try to make a market or money in the Connected Home Market. Why? Because, I believe, Apple would license Airplay and commoditize the entire opportunity in Connected Home or Home Networking market.

 

The scale of Apple consumer devices and iTunes penetration would both threaten and attract content creators to make it available for consumption through the ‘Apple’ channels and devices.

 

Half-Baked?

 

I had a theory that Apple rushed the AppleTV as a preemptive strike to GoogleTV. Apart from a size improvement and addition of Netflix – the current release of AppleTV (using SW Version 4.0) is not much of an upside to spend the $99. The looks and feel, including the navigation, is very similar to the old AppleTV.

 

Also I found interesting behavior on how the thumbs nails were being generated for the Netflix or the YouTube app. The thumb nails (or Poster Art) is rendered bottom up from the screen – so when watching the screen you can see the thumbs nails being refreshed just below the bottom of the screen and then continuing up.

 

The user interface (including navigation) is a virtually identical to the old AppleTV – which makes me think – what OS is this device running? A variant of OS-X that was on the old AppleTV or is the iOS running  the ported over AppleTV application layer from the old AppleTV? 

 

Bottom-line

 

I still have to play with it more (e.g. try out the USB port) but for now part of my recommendation is in line with the Gizmodo post – if you rent or will rent content from iTunes, own a lot of Apple devices like the iPad, iPhone etc. – then the new AppleTV will fit well with your needs and at a very good price point. And if you do not happen to have any Netflix-ready device or need a second one – then the AppleTV is perfect.

 

The new AppleTV will become a real game changer once Apple brings the App Store to it till then, if you can, take a wait & watch attitude. Heck if you are a technology adopter or geek, it may not be a bad idea to get the GoogleTV available on Logitech Revue or the Sony TV and Blu-Ray Players.