Apple TV stated to enter the heavens at $99

Steve Jobs’ “hobby” — the Apple TV — is slated for a radical revamp, an extreme price slice, and a future in the cloud, according to “a source very close to Apple.”

Engadget reports that the next version of the Apple TV will run iPhone OS 4.0, have only enough on-board RAM to function as a conduit to the cloud, and will cost a mere ninety-nine bucks. Today’s Apple TV runs a cool $229.

The interesting part of this rumor is that unlike Apple’s current buy-’em-and-download-’em local storage scheme for iTunes Store content, the purported next-gen Apple TV will presumably suck content from our ol’ buddy, the cloud — even though Engadget’s source also states there will be an optional Time Capsule–based local storage option.

More and more, the digital tea leaves that one must consult to divine Apple’s plans point towards a cloud-based content future. There is, of course, that $1bn data center that is nearing completion in Catawba County, North Carolina. Then there was Apple acquiring then shuttering the on-line music-streaming service, Lala. And as we have mused before, the locked-up-tight iPad appears to be designed for cloudy content communication.

Not that Jobs & Co. will waltz merrily into command of the online-content market. Just last week, Google announced its own online-TV effort, which Mountain View’s Rishi Chandra described as “where TV meets web, and web meets TV.” Google is backed by Dish Networks, Sony, Intel, and Logitech. Even mega-retailer Wal-Mart wants in on the game, after acquiring IPTV hardware, software, and services vendor Vudu this February.

Wal-Mart’s Vudu pickup gave the Arkansas giant access to that company’s relationships with content providers. Google’s got YouTube and the partnerships that come with that. And of course, Apple’s iTunes gives Jobs a content head begin in negotiations with, for example, CBS and Disney, as The Wall Street Journal reported last December.

On the other hand, Jobs’ vendetta against Adobe Flash is causing him to be rebuffed by Time Warner and NBC Universal, according to Friday’s New York Post, because those media giants aren’t keen on going through the time and expense of converting their big Flash-based video libraries.

If Engadget’s source is correct, The Reg admits to a bit of puzzlement over the purported $99 price point. As Apple execs have admitted, as currently configured the iTunes Store is essentially a break-even business that is designed to lure customers into buying Apple hardware and developers into building apps that also sell hardware.

But at $99 a pop, Cupertino will not make beaucoup bucks from Apple TV hardware. There needs to be another way for Apple TV revenue to help pay for that $1bn data center — so we are willing to bet that Jobs will structure content deals and set consumer pricing such that as video and movies stream into a new Apple TV, a healthy flow of dollars will stream into Cupertinian coffers. ®

Bootnote

Steve Jobs first publicly used the word “hobby” to describe the Apple TV business in an interview back in May 2007 — a term reiterated by COO Tim Cook this February. In 2007, Jobs told the interviewer: “I use the word ‘hobby’ because it’s provocative.”

Apple TV stated to enter the heavens at $99

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