Wednesday, February 27, 2008

THE iFLOP

Steve Jobs tried to design --and dictate--the future of television. Here's how he failed. Steve Jobs, the Silicon Valley Svengali who gave the world geek chic in the form of the iPod, iTunes and the iPhone, looked ready to do it yet again last summer when he offered the first glimpse of Apple (nasdaq: AAPL - news - people )'s iTV. The slender, elegant gray box would revolutionize television, he proclaimed, and let sofa spuds grab all sorts of video (TV shows, movies, Web clips) from all sorts of sources (cable, satellite, the Internet) and zap it to their TV sets. The details were sketchy, but--coming from Steve Jobs--iTV promised to tie it all together in a simple, sexy, fun package. "This is the missing piece," Jobs told his disciples, gesturing to a device the size of a textbook. "Here it is."

His timing was impeccable. When the product debuted in late March, the cost of delivering TV shows over the Internet had plunged, and the Web was brimming with video of ever greater variety and quality. The major TV networks were adding online downloads of such hits as NBC's Heroes, and Hollywood's titanic studios had begun talks to rent movies online through Apple's iTunes service.

Six months later iTV is a flat-out iFlop. Renamed Apple TV upon launch, the ballyhooed box has sold perhaps 250,000 units--far behind the 1 million sold for the iPhone, which was priced twice as high and has been on the market less than half as long. Apple, which declined to let FORBES interview Jobs and other execs for this story, provides detailed sales data for the iPod and other digital wonders but won't reveal any numbers for Apple TV; apparently the truth is too humiliating.
antweaver

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