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February 19, 2013

Apple TV Quests for Scale in India

By Tara Seals, TMCnet Contributor

Apple (News - Alert) TV has made its debut in India via its website, signaling an imminent launch in retail stores in that country.

Apple is asking Rs 8,295 – or about $150 – for the palm-sized device, which wirelessly connects to a big-screen TV to stream films from iTunes and presumably a handful of over-the-top (OTT) partners (local Indian partners have not yet been announced), along with photo slideshows (via iCloud and Photo Stream) and music. It doesn’t require syncing to the consumer’s iTunes library.

Apple’s international launch of Apple TV has been slow and steady, and the device is readily available in Europe, China and other areas of the world. Users globally can also purchase one in North America and use it elsewhere, although content like Netflix and YouTube (News - Alert) may be blocked depending on the location. But the India launch gives Apple the opportunity to build massive scale quickly, for what Steve Jobs famously called “a hobby.” It boasts 167 million television subscribers, making it the second-largest market in the world behind China.

Looking for footholds globally also gives Apple the opportunity to do elsewhere what it can’t seem to do here: disrupt.

“I think Apple is largely stymied in the US to do anything truly disruptive in terms of the television ecosystem,” Sanford C. Bernstein Senior U.S. Media Analyst Todd Juenger told an investor briefing last fall. “All of the content that people care about most is in the hands of the U.S. media companies...None of them has really any discernible upside to gain from entering into any agreement to make that content available to Apple...In fact, they have a lot to lose by doing that.”

However, overseas, Apple could find more purchase.

For instance in Europe, “Several players (including new entrants and telcos) are trying to potentially find a niche and a play; if this process were to lead to a sufficiently fragmented market, it would be easier (relative to the U.S.) for technology companies to find a foothold in content,” said Senior European Media Analyst, Claudio Aspesi. “If the market fragments that much, then, it will be all that much easier for Apple (or Google (News - Alert) or Amazon), at some point, to come in and consolidate this.”

And India, which is home to over 600 television channels that are beamed out to the masses, offers pent-up demand for connected TV content strategies as broadband continues to roll out. According to 6Wresearch, the Indian smart TV market is expected to reach $10.41 billion by 2017, growing at a CAGR of 87 percent throughout the forecast period.  That’s because the market is miniscule now, having been valued at just $0.22 billion in 2011.

Edited by Allison Boccamazzo
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