Apple TV teardown gives App Store clues, says analyst

Computerworld - Apple will add App Store functionality to its new, miniature Apple TV in the near future, a Wall Street analyst said today.

The $99 device, which Apple announced on Sept. 1, is a close sibling of the iPad in its component composition and uses the same iOS 4.1 that runs on the iPhone, iPod Touch and iPad, two huge hints that Apple will sell apps to consumers, not just rent content to stream to TVs, said Brian Marshall of Gleacher & Co.

"I'm a little disappointed that an App Store didn't make it into this first version, but it'll come," Marshall said. "Apps will give consumers a much more media-rich environment than simply consuming content."

One easy bet in Marshall's mind: games to turn Apple TV into a de facto video game console.

Earlier on Wednesday, the iFixit site published photographs and a step-by-step description of its "teardown" of the new Apple TV, and found close similarities to other recent Apple hardware, notably the iPad.

The Apple TV relies on the same Apple-designed A4 application processor that powers the iPad, said iFixit, down to the 256GB of system memory integrated with the A4 in both the iPad and the fourth-generation iPod Touch. The iPhone 4 boasts 512MB of system memory.

That processor and amount of system memory -- as well as the fact that the Apple TV uses iOS 4.1 -- means that the new device could run applications currently stocked in the App Store. That's unlikely, however, since the display resolution of the Apple TV doesn't match that of the iPad, said Marshall. Instead, developers will have to rework their software to utilize the additional space and resolution.

Another clue that led Marshall to conclude that an Apple TV App Store was possible now -- and even more likely when the device receives its inevitable upgrade -- is the 8GB of flash RAM that iFixit uncovered in its teardown.

"That's enough for about two high-definition movies," said Marshall, speculating that the 8GB of storage would be enough to house the operating system and downloaded applications, and serve as a cache for streaming video to the television.

IFixit spotted clues that Apple could easily double the storage space. "There is an empty spot right next to the Samsung NAND flash that looks to be the perfect size for putting another Samsung NAND flash chip," iFixit's CEO, Kyle Wiens, said in an e-mail. "Could Apple be planning a higher capacity Apple TV in the future?"

Wiens added that it was "pretty remarkable" to see 8GB of flash RAM in a device priced at just $99.

Although an App Store for the Apple TV is not a foregone conclusion, earlier this month Apple CEO Steve Jobs told Bloomberg Businessweek that the company could make such a move when the time was right.

Marshall didn't speculate on when that right moment would come, but he thought it could be as soon as early next year as part of a push to boost what are typically softer sales during the first quarter.

"Apple's seasonality could be really low in the first quarter [of 2011]," he said, ticking off several possibilities that could keep the company's sales humming, including a refresh of the iPad -- which turns one next year -- and an Apple TV upgrade.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@computerworld.com.

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