Apple Drops the Computer, Picks up the Phone, and Streams to the Living Room

"I think a lot of people may choose to wait," said Adam Christianson of the MacCast podcast website MacCast.com, "since they’re either already in service contract and don’t want to carry a second contract, or just because they can’t get good Cingular service in their area."

While the jury’s still out then, prior to product launch, about Apple’s chances of surviving and flourishing in a relationship with a staid network service provider who launches new handsets at the rate of one every 10 days, it appears likely that Apple’s agreement with Cingular may have an unintended side effect of limiting its potential audience dramatically in the first few years.

The one small hope to see the product on other GSM providers in the U.S. came from Cingular president and CEO Stanley Sigman, when he noted in his on-stage appearance that Apple had chosen to be just a handset hardware provider to Cingular rather than the more tightly-bound Mobile Virtual Network Operator (MVNO). The restraint Apple showed in becoming a hardware-only provider to Cingular may allow the company to sell the product unlocked to those users who want all the benefits of the iPod and WiFi-enabled device without the constraint of being locked to a particular carrier. The use of EDGE, a last-generation data transmission technology that’s been surpassed for the past year by UMTS, EVDO, and HSDPA, may also limit the device’s appeal to those who want to have a consistent data connection, although Jobs promised the company would eventually provide fully 3G-compliant handset at some point in the future.

The other product Jobs showed, Apple TV, also benefits from what appears to be an embedded version of OS X. The device, which was introduced last year as iTV and will ship in February, has a robust version of Front Row as the front-end user interface. Like the iPhone, the Apple TV device can be set to sync with iTunes and has DRM rules somewhat similar to the iPod: a user can fully synchronize movies, photos, and music from one computer to the Apple TV’s internal 40GB hard drive, but can also stream content from up to five other PC or Macintosh computers. Unlike the forthcoming SlingCatcher, though, the Apple TV device is limited to streaming internet content from the iTunes store—a point of differentiation SlingMedia is sure to capitalize on with the growing number of consumers out there who find themselves watching YouTube or GoogleVideo clips on their computers but desire to watch the same content in the more passive viewing environment of the living room.

All in all, Macworld 2007 San Francisco appears to be the culmination of a move that began at Macworld 2005 and continued through the 2006 event: the move from Apple’s role as the underdog computer company that made great hardware and software to a role as dominant consumer electronics device manufacturer.