The annals of technology history show us that typically a market takes hold when there are at least two conditions present: a) users who embrace a particular device, platform or tool and b) an open system that allows developers to innovate and create new value on top. The relationship is often symbiotic. Developer innovation brings in consumers. And more users creates opportunities for developers.
The PC, Windows and Mac operating systems, mobile devices and web services all took off because both conditions were met. Therefore, it's no great mystery why Internet-connected set-top boxes are not mainstream. This despite the fact that TV is poised to become the next great platform.
To be sure, part of the reason is educational. Most consumers have no idea you can even connect a TV to the Internet. Nor are they aware of the value in doing so. However, I fundamentally believe that a lot of it is wrapped up in the other side of the equation - developers.
To date, developers have not been given the tools they need to truly innovate and create value in the living room. It's coming, but very slowly. Microsoft has opened up its XBox 360 console to backyard game developers through a program called XNA (Microsoft is an Edelman client). Comcast at CES in January announced an open cable platform. But what about Apple?
It's no secret that Apple TV has not been a monster hit, but it's slowly picking up steam. Piper Jaffray estimates that 1.6M units shipped in 2007 and that an additional 2.9M will be sold in 2008. So what would give the device a shot in the arm? Content is part of it. But Apple solved that with the 2.0 update that shipped earlier this year. The real answer is developer innovation. Developers are already creating their own unofficial solutions. One, from Apple Core (pictured above, curiously just shut down.
To date, more than 100,000 developers have downloaded the iPhone software development kit (SDK). This will create all kinds of value on a platform that has arguably sold double the units as Apple TV. Expect Apple to do the same with Apple TV in the near future. It may not be at this year's Worldwide Developer Conference (WWDC), but I guarantee it's coming. They're not going to let the hackers have all the fun. Further, watch for TiVo and Slingbox to do the same.
Open systems and developers create value, which in turn, can help IP-connected set-tops take off.
