Apple’s Eye on DVR for Mac mini

Dec 12, 2005  •  Post A Comment

Speculation has been rampant on the Internet that Apple will introduce a new version of its Mac mini, Apple’s little $500 multimedia computer, with a built-in digital video recorder at the Macworld Conference & Expo in San Francisco next month.

Industry experts consider DVR capability the logical next step for Apple, given that its video iPod has become a game changer for portable television content in the less than two months that it’s been on the market. Apple has already joined with both NBC and ABC to deliver content to the device and is said to be in talks with most major content providers.

Now the iPod is viewed as one of the critical new distribution platforms for TV content.

The question is whether Apple can extend its brand magic to the home entertainment space. That’s a wide-open area, and if Apple can indeed offer DVR capability and a well-integrated video experience, it could capture a leading position in the home entertainment market as it’s done with music.

“If Apple can translate the user experience of the iPod to a home device, it can hit another home run,” said Kaan Yigit, an analyst with Solutions Research Group in Toronto.

Michael Gartenberg, an analyst with JupiterResearch, seconded that notion in his blog. “This is exactly the type of media hub that could gain the acceptance of the mass market,” he said.

Others, too, believe an Apple DVR has potential. UBS Warburg analyst Benjamin Reitzes raised his estimates on Apple last week.

Well-known Apple commentary site ThinkSecret.com first reported that Apple might introduce the new version of the Mac Mini with a DVR on Nov. 29. Apple did not return calls for comment on this story.

The iPod has changed the way consumers think about downloadable and transportable media, and there’s no reason Apple wouldn’t pursue a parallel strategy on the video side, said Raj Amin, president of Amin Media, a strategic consultancy focused on new media.

Apple has an astounding 53 percent market share for digital music players, while no other brand has a share even in the double digits, according to Solutions Research Group.

That’s why the company should not be discounted as a powerful player in the home entertainment sphere, experts said.

Late last month Tivo announced that it will build iPod functionality into its DVRs so users can transfer recorded shows to the portable video players, suggesting that device makers will increasingly look for ways to offer the most complete, one-stop shopping experience possible.

The home market is a tougher space to penetrate because a home portal must speak to many different devices.

“[Apple] make[s] beautiful, clean, sophisticated interfaces that are easy to use and have excellent quality and wrap into slick-looking hardware that’s beautifully designed,” said Patrick Norton, a consumer electronics expert and the host of online TV show and video podcast “Digital Live TV.” “They keep adding more blueberries to the muffin.”

But Apple’s dominance in the digital music and media space does not guarantee a successful DVR strategy, said Bruce Leichtman, president of Leichtman Research Group.

“Consumers have demonstrated that they like DVR as a feature within the cable or DBS set-top boxes,” he said. “With the rollouts from DBS and cable operators continuing, and Tivo’s strong brand in the business, there is limited market opportunity for Apple in the DVR business. One should not believe that the company’s recent success with the iPod has any connection to its potential in the DVR business.”

The success might not translate for one simple reason: iTunes works on both Macintosh- and Windows-based computers, analysts said. On the other hand, an Apple DVR, by its nature, would likely live within an Apple computer, said Steve Hoffenberg, director of electronic media research at Lyra Research.

Still, Apple’s potential play is more about the emerging “entertainment server” space, said Mr. Yigit. “They are aiming to develop an easy-to-use home/mobile portal which allows users to mix and match personal and commercial content and choose, play and sequence on any platform as they wish.”