Apple's Positive Uncertainty: Universal Remote iPad
Disclosure: I am long AAPL.
We first started floating the idea of iPad mini as an iRemote when we tried to come up with a mock agenda for the iPad mini event. If this product is worthy of its own event, there needs to be something to say. Summoning members of the media all the way to San Francisco to tell them that Apple has designed an iPad that is thinner with a smaller screen would take about five minutes. Not even Apple is that vain. So what is there to discuss about an iPad mini?
1- Introduction of the new name. iPad mini is a nickname used by analysts to refer to Apple's soon-to-be-released product. This precedent of applying a nickname to a future product also occurred with the iPad. Many were calling it the iTablet, iSlate or iBook before Steve Jobs revealed iPad. If the new name of this iPad mini is able to differentiate this product from the larger iPad, it could be an unexpected stock mover. Possible names include iPad Air, iPad TV, iRemote, or iPlay. Creating a perception of necessity is important for sales. The new name could do just that.
2- Credit given to Steve Jobs. It has been widely publicized that Steve Jobs argued against the initial idea of a 7-inch tablet, but Eddie Cue has recently remarked that Steve was changing his tune before he died. Why was he changing his tune? Perhaps it has something to do with the following quote he gave to Walter Isaacson on page 555 of his biography: "I'd like to create an integrated television set that is completely easy to use. It would be seamlessly synced with all of your devices and with iCloud." No longer would users have to fiddle with complex remotes for DVD players and cable channels. "It will have the simplest user interface you could imagine. I finally cracked it."
Because Steve used the phrase "television set" in this quote, many analysts have run with the idea that Apple is planning to enter the HDTV market. However, if you read the entirety of the quote, you see the important elements of the television model are the simple user interface and the iCloud sync. Both of these elements can be implemented through the $99 Apple TV box and a universal remote app built into the iPad mini. If the mini is able to excite consumers into adopting Apple products in the living room, it will create another round of demand euphoria.
3- Benefits of Apple TV. On September 24, Apple updated its Apple TV software to include shared photo streams with the ability to comment and receive notifications of new content. Shared photo stream is Apple's answer to the popular Facebook app called Instagram. If Apple can be the first to bring an Instagram experience to the big screen, it could mark Apple's first major social networking victory. In addition to shared photo stream, the Apple TV software was updated to include Airplay for wireless speakers and devices including the Mac, iPhone, and iPad. Airplay mirroring allows home movies, photos, websites, and apps to stream onto the big screen from your iPhone, iPad, or iPod Touch. Also included with Apple TV are services such as Netflix, Hulu Plus, sports leagues, iTunes television shows and movies, and 1080p HD. Apple does offer a remote app that allows you to control the Apple TV with any Apple mobile device, but control of third party devices such as Blu-ray/DVD players, cable boxes, etc. is still unsupported.
If you're looking for confirmation from CEO Tim Cook regarding the future of the current Apple TV box, it's easy to find. At the May 29 D10 conference, he mentioned that Apple TV is not a fifth leg of a stool, but is doubling in sales. In the first six months of fiscal 2012, it sold 2.7 million units. "It's a key part of the ecosystem. This is an area of intense interest for us. The customer satisfaction with that product is incredible. It's off the charts ...and so, we're going to keep pulling the string and see where it takes us."
Does Apple really want to compete with Sharp, Samsung, Sony, and Vizio in the $1,000+ price wars? Apple has become a company built on the business model of selling tens of millions of devices per quarter. That could happen with the iPad mini/Apple TV platform. It's unlikely to happen with a $1799 Apple HDTV. Expanding on the current model makes a lot of sense.
4- Benefits of iPad mini. Any idea how much a high quality universal remote costs? In our theater room, we have a Logitech touchscreen remote that retails for $279. The touchscreen suffers from delay issues that make it difficult to use when quickly changing channels or quickly browsing different inputs. The theory of a universal remote is sound. The software execution isn't quite ready for prime time.
However, the timing for such a product appears to be ready. In the last two years, we've seen that living room technology is coming with built-in wireless capabilities. Blu-ray/DVD players come with built-in wireless, gaming systems come with built-in wireless, TV's have wireless, home security systems have wireless ...it's a wireless world. If Apple can come up with a native app for the iPad mini that seamlessly controls these various devices and syncs them into the Apple ecosystem, it will be a game changing application. Households will purchase multiple iPad minis to be available in each room of the house. The profitability of the Apple TV box becomes irrelevant if Apple can bundle iPad minis alongside it.
Ben Reitzes certainly believes that TV remotes, not TVs themselves are Apple's "next big thing." He said, "We believe the 7" screen could be used for traditional content consumption such as reading books or watching movies, but Apple may have bigger plans for this device over time. With iCloud, we don't see any reason why Apple wouldn't eventually allow an iPad to be an interface for the TV -- to perform basic computing tasks with a virtual keyboard like checking emails and calendars, surfing websites, editing your photo stream and even chat with iMessage. The iPad could one day be used as a central command for the digital home ...controlling common household items like lights, HVAC units and TVs."
In our opinion, current expectations for the iPad mini are too low. Even if iPad mini has nothing to do with Apple TV or universal remotes, but is priced below $350, it will be the hit of the holiday shopping season. If iPad mini is linked to Apple TV and the rest of the living room through a universal remote app, households will purchase multiple iPad minis -- Apple won't be able to meet the demand for years to come. Last quarter, Apple sold 17 million iPads with an average selling price well above $500. What will happen if the iPad mini is a hit product priced at $299? Will Apple sell 30 million minis in a quarter? Will they sell 40 million? Could we see the day when the iPad mini sells more units per quarter than the iPhone? You better believe it. The way Apple presents this product to the public is very important. If it can create differentiation within its lineup of products by framing the iPad mini as a universal remote, Apple shares will surge on the unexpected news.
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Likely you comments are just made up bull to drive the stock. I got $10K says you are lying, want to call me on it?
Give me your terms and conditions, and a credible payment guarantee.
Please respond.
I would not spend $ 100 if android announced a similar one because I do not have patience for them to get it right several versions later.
The idea is not the the iPad Mini is a high end remote. It is that the remote is the killer app for the iPad Mini.
A "killer app" is an application that justifies the purchase of a device. Like Office was for the home PC. Like some great game might be for a new video game console. If a universal remote app is created and the Mini is an affordable path to that connectivity (besides everything else the device will do, obviously) it may sell a ton. That is the point here, I think.
Yes, of course. But if there is a cheaper one, you may buy one if you don't already have one, or you may buy it as a spare to have around the home. As these tablet connectivity devices get cheaper homes will have several (like TV's in the late 80's and 90's -- televisions became so cheap middle income folks put one in the kitchen). An iPad mini may be a gateway to several tablet households and a highly functional remote app may be one reason.
The ipad mini may lessen Apple's overall profit margin, however they will be competing in a lower end market that would otherwise be dominated by amazon and google, thus creating a new revenue stream.
The profits they make on the millions of ipad mini's sold will grow its EPS
1. Why would Apple not simply do a firmware update of the Apple TV box and give access via existing remote and or iPhone, etc.? Answer - probably because the experience is not a touch experience like a traditional remote. Even on the iPad one is still just manipulating a pointer on the HDTV. Such a new app would use the mini's touch interface in a nice size format.
2. Given the above, why not simply do an iOS7 with a new "remote app"? Answer - size matters, the standard iPad is a little large for a dedicated remote. Notwithstanding, if I truly want a dedicated remote, and the price is comparable, then it is conceivable to have a mini or two around the house. I personally think that's overkill, but I can see hipsters doing such. Or to be fair, serious sports fans, which I'm neither.
3. New Century has a point, what would be so different about Apple's experience that a new wave of "apps" on other tablets won't dismiss Apple's game changer and or make it obsolete in 2-3 quarters? Answer - New Century has a point!
If you have used a GS III or Galaxy Nexus, you would know that the Android experience is no longer inferior. I've used an iPhone 5 in real life as well; sure, it's impressively thin and light, but iOS hasn't changed since the original iPhone and it is no longer leading the way - it is getting dragged along. Every "milestone" iOS6 update was a feature that existed in Android (and or other OS's) already.
And if you'd like to be able to use the native maps/navigation act to plan mass-transit directions, Android is vastly superior.
The plan was to drop them both from three successively higher heights.
The GS III shattered on impact when dropped from the second height (roughly 5 feet).
The iphone5 handily survived all three drops with barely a scratch.
a truly universal remote that incorporated Siri would be revolutionary, and a huge profit engine for Apple.
See a movie starting at 9? Watch the trailer right from the interface. Want to see similar movie/tv suggestions? Right there in the interface. User reviews, on demand programming. The possibilities are what I would be excited about.
As I stated, my ex studio CEO friend (who knows everrything in Hollywood) told me that Apple either has to buy a studio or sweeten the pot considerably before all the content providers sign on. The negotiations have been going on for some time. and what does Apple have? 110 billion cash and growing fast. By March they have mave 130 billion. They need to use it too. Plus a 100% dividend hike. 3% is much more fair and reasonable.
I know one thing. After this next earnings release, which should be fine and grand, but just the tip of the iceberg, the next two will be collosal. Remember last January's earnings? Maybe double that. Truly. And meanwhile the stock is sitting at bargain levels of 12 PE when their true growth is closer to 50%, most of it sustainable for several years. By then, Apple will and should be a trillion dollar company. That means the stock doubles from here within two years. And 50% of that move could come between now and January. Don't believe the Apple bears. They are liars and just jealous. Apple is putting a lot of competitors out of business and costing a lot of jobs and weath so naturally they make enemies without doing anything wrong. Just look at HP, RIMM, Sony, on the down the line, and they really hurt Samsung too, with the successful lawsuit that is.
As for the Apple TV, inside info from Hollywood top level (I know a former studio CEO) is that Apple has been actively trying to negotiate massive streaming content deals on their terms. The studios are balking. Apple needs to show them the money and give them a betetr deal than the music biz got. Once they do, and Apple can afford it easily, the domino effect will all be on. Of if necessary, Apple actually buys a studio. Or makes a massive cash infusion or two. How much deos Time-Warner take to buy? Nice APple purchase, then Disney CEO is already on Apple's board. See what I mean?
So yes, start with the super remote, which we all need, then go for the whole enchilada and in the process buy about 20% of Hollywood. Then everyone wins, including stockhoders. I estimate this to happen by next fall. Not this year. It is too complex and involves about 10 billion investment for Apple. Maybe even more.
In any case, bears stop denying and weak hands stop being afraid. This stock is going over $800 by January. Take it to the bank.
For the topic at hand, I am of the opinion that if Apple wants to create a universal TV control, it has to be a dedicated one. That control better be in front of the TV all the time. I sure hate to have to hunt down the control when I want to watch something on TV.
As for ease of use, the cable box that comes with my cable subscription runs on MS - CE. Interesting isn't it? The contents actually come through internet. I found the remote control quite easy to use and intuitive, even my wife thinks so.
Right now, I use 3 remotes, one for cable box, one for TV & blueray (same brand) and one for my AV receiver. The cable box could also control the TV but I haven't bothered to train it. Yes, it would be nice to have a universal remote to control all the gizmos but it is not absolutely must have. I have survived with multiple remotes for a long time.
I don't believe that Apple will be able to dominate audio/video/TV like they dominte the smartphone and tablet market unless they can come up with a standard and get every player to buy in. It has to be public standard that Apple is willing to licence to all players. I think that is a little against their corporate culture at present. In the end, it will be a niche market.
There's an app for that? I'm all in !!!! Welcome to the 21th century.
I'm joking, but all of these 'unimaginable' tasks are actually technologically possible, if Apple really wants it done.
Buildling management systems are already on the market for a while. They are not cheap. I looked into them when I built my last house. The house automation industry has sort of a standard.
The concept has legs and will certainly result in hundreds of millions sold. If you are right.
My daughters iPad controls the family room TV channels on Comcast with a free app. Very cool and it has nothing to do with the TV set itself. The set-top box allows the channel changing through wireless coonection to it. An improved app running on a smaller mini iPad makes practical sense as the iPad is just too big to use as a remote. The iPhone is too small. The mini will be just right! An iPad mini would be optimal in my mind.
To synergize this the home controls aspect makes logical sense as security and home monitoring is not yet economical. It could be if Apple embarks on a total home control system oncluding remote tv control, lights, power, and remote monitoring and the main controller being the iPad mini.
I am crazy in love with apple..
Such a revolusion.. I been thinking of this thing before, that it would be nice to sync everything around us.. And apple just keep on syncing everything..
First the iTunes with musics, files, pics, games, etc...
Then iCloud for work..
Now they came up with "iRemote"?
Nice :)
This makes a lot of sense for Apple to do this. Apple TV is already awesome and to control it with a mini iPad sounds like something Apple could do really well.
People are using the regular iPad for everything under the sun, and the smaller size of the mini would be excellent for this type of thing.
This is wholly believable, and it's another ecosystem tie in that will make sales of a mini iPad astronomical.
Please give us your thought more often Jason!!