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Can Apple pull a Dyson with televisions?

24 May

It’s not a weapon, it’s the Dyson ball.

Ever since the publication of Steve Jobs’ biography last fall, the rumour mill over whether Apple is going to launch its own flat-panel television has been in high gear. At this point, with Jobs claiming he had finally “cracked” it and reports that production has indeed begun, such a TV is looking more like a matter of when, not if.

Still, some technology and consumer electronics analysts doubt Apple’s chances since everyone already has a flat-panel TV. The market is “mature” and not very profitable, they say, so the company is going to have a tough go of it.

Such doubts are likely unwarranted, not just because betting against Apple’s track record is unwise. More to the point, believing that a new player can’t succeed in a mature market ignores how innovation works, not to mention the fact that markets evolve and grow because of new approaches.

If there’s a company that perfectly illustrates this, it’s Dyson. Back in the 1970s, British inventor James Dyson found himself frustrated with his Hoover vacuum cleaner. It clogged easily and lost suction, which meant he had to continually clean out the insides, including the bag. He resolved to build a better vacuum and, using sawmill technology as his inspiration, he did just that. A Japanese company licensed his new-and-improved vacuum design and it quickly became a hit there.

Dyson started his U.K. company in 1992 and launched the DC01, which became the country’s top-selling vacuum in just a year and a half. The DC01 was different from other cleaners because it had at its core Dyson’s dual-cyclone technology, which uses two rotating barrels to create suction. Like all successive models, it didn’t use dust bags or clog, so it retained its sucking power over time.

Dyson has since exported his cleaners to other countries, where they’ve enjoyed similar success. The company has 40% of the U.K. vacuum market and is the share leader in nine countries, including the United States and Canada, according to tracking firm Gfk.

With a typical retail price between $500 and $600, the vacuums aren’t cheap. Still, they’ve become hits because of their lower total cost of ownership – they have no bags and the filters can be washed in water, so they don’t need to be replaced. Unlike other cheaper cleaners, Dyson vacuums require a big initial outlay, but no additional expense.

Why else have the vacuums done so well? At the risk of sounding like a shill, it’s because they’re awesome. I’ve been testing out the new DC37 canister vacuum for the past few weeks and can honestly say it’s the best vacuum I’ve ever used.

The DC37 is Dyson’s first canister vacuum to use the company’s ball technology, which replaces wheels with, you guessed it, a big ball. The result is that it rolls smoothly and never gets awkwardly caught or tangled in the power cord. (On a related note, the company recently announced that all its vacuums in Canada were going full ball, as in no future products will have wheels. Canada is the first country to go all-ball – a spokesperson says this is because of the feature’s big popularity here.)

Dust toupee. Yum.

As for suction, the results are astounding. My wife and I were shocked when we looked at what the Dyson picked up, or in other words, all the hair and dust that my older vacuum was leaving behind. That thing that looks like a disgusting dust toupee in the picture on the left… yup, that was in our carpets.

I’ve got really bad allergies and, perhaps foolishly so, live with a house full of cats. Sneezing, wheezing and taking allergy medication is part of every-day life. Seeing the dust toupee, then, makes me optimistic that the Dyson vacuum cleaner will actually improve my quality of life. It’s not often I can say that about an appliance. The vacuum’s hefty initial price tag, to me, seems well worth it.

Many consumers agree, which is why Dyson regularly reports record profits. Heck, James Dyson even got knighted for his invention. Most germane to this conversation, however, is that he proved that a little innovation can open the door for a new company to enter and conquer a mature market – and make good money in doing so.

The company is doing the same thing with fans. Launched in 2009, Dyson’s Air Multiplier shuns regular blades in favour of the sort of “asymmetrical impeller” used in jetskis and turbo chargers. With a price tag of $400 to $550, it seems like something only crazy people with way too much money would buy.

I tested one of these too last year and nope, like the vacuums, they are also superior. The price is steep, but the return value is worth it. Not surprisingly, Dyson is eating up the competition – the company already has two-thirds of the hot Australian market, for example, where consumers really know their fans.

So, to get back to Apple, can the company pull a Dyson when it comes to televisions? Well, it would indeed be hard pressed to enter the market with a me-too product. Apple will obviously have to do something different – something innovative – to make a dent.

There are plenty of problem areas when it comes to TVs. At the top of the list are the multitude of remote controls the average person has sitting on his or her coffee table. It seems obvious that Apple, with its huge app ecosystem, could do much to eliminate all of these with virtual counterparts on iOS devices. Want to control your Blu-Ray player, TiVo, Roku or Boxee device? Throw out their remote controls and replace them with apps on your iPad, iPhone or iPod.

The rumour mill also expects Apple’s Siri voice assistant to pop up on its television, as well as FaceTime video calling and maybe even gesture recognition. Some of this has already been done, but nobody has packaged it in a particularly sexy or effective way. There are doubtlessly other innovations that could be made, but if I could think of them, I wouldn’t be just a lowly journalist.

Aside from technological innovation, there is also room for experimentation on the cost side of things. Not only are cable bills getting really high, there’s also the big outlay for the television set itself. There are reports that Apple may be trying to cut some sort of subsidy deal with TV providers, similar to how cellphones and their service are sold. While the thought of such a contract is abhorrent to some, if such a deal were structured properly it could revolutionize how people pay for television.

All told, there are many ways in which Apple can “crack” the television market. Like Dyson, the company has a proven track record of changing or inventing markets. That includes changing how people pay for things – and how much they expect to pay. The two companies are also similar for selling what are perceived to be premium products, with high profits following.

So what about Dyson? While everyone is trying to guess what Apple’s next product will be, what will the vacuum and fan seller do next? Design director Rob Green wouldn’t tell me when we spoke back in the fall, but he did say Dyson’s research labs are full of potential new products. In particular, he hinted that the kitchen – with appliances such as coffee makers – is fertile ground for re-invention.

“There’s an awful lot of user input that has to go into making a cup of coffee. It’s also quite time consuming,” he said. “Anywhere where there’s a lot of user interaction or input, there’s room for improvement.”

Sounds kind of like the average television, doesn’t it?

 
6 Comments

Posted by on May 24, 2012 in apple, dyson

 

6 responses to “Can Apple pull a Dyson with televisions?

  1. Jean-François Mezei

    May 24, 2012 at 1:05 am

    I don’t think it is about the remote or even the TV set. This will be about content distribution.

    Will Apple do to video what it did to music: become the largest video store and become an OTT provider that competes against legacy TV and BDUs ?

    Or will Apple become slave to legacy BDUs like Comcast Bell Shaw and Rogers who will demand Apple remove certain features from its TV in exchange for them subsidizing the TV sets ?

    Vertically integrated BDUs like Comcast, Bell, Rogers and Shaw won’t want to subsidize TV sets who have the ability to bypass not only the walled garden BDU, but also their TV networks.

    So a subsidized Apple TV set may have fewer functions (such asccess to OTT services) than an unsubsidized one from Sharp, Samsung or Sony.

    Sony owns Sony Entertainment. Perhaps if Apple bought Disney/ABC, it would then have the leverage to get access to content.

    The hardware may have been ready some time ago, but I think that the business case for Apple entering the TV market isn’t there yet. Apple needs to strike some very special deals with content producers for access to content before it can make a compelling offering that will truly differentiate itself from the other TV makers.

    And don’t forget that Sony has all the ingredients to make a compelling offer, it just doesn’t have the management adrenaline to put it all together as a single compelling offer.

     
  2. Marc Venot

    May 24, 2012 at 4:08 am

    In this long article is there any proposal on what Apple not only can but more importantly may do? even compare to the new gizmo from Nintendo (u wii)?

     
  3. Ben Myers (@benkmyers)

    May 24, 2012 at 11:33 am

    I think that all these capabilities already exist, but the package is not yet easy to put together for the average consumer. My PS3 and Sony TV work together with one remote and interact via HDMI cable (turn on PS3, TV automatically turns on); there’s a Netflix app; you can download movies and games from their store at reasonable prices. So it’s all there, but I doubt that most people have made the mental effort to find and integrate their entertainment as I have.

    That’s where Apple comes in. Take all that stuff and put it in one box and make it shiny. People also trust Apple for its usability and attractive design. I imagine that there are a ton of sales here based on the brand alone. The TV itself might not be much more than what I described, but the brand and integration with other devices is what will sell.

    It’s kind of the opposite of Dyson – innovation is not even needed.

     
  4. Gerry Corcoran

    May 24, 2012 at 11:46 am

    I’m still not convinced Apple is going to enter the TV market but if they do and it’s with a device subsidised through TV providers like cell phones, they’ve already lost. What made the iPod and to a much lesser extent, the Apple TV popular was how they gave people easy access to be able to purchase content from iTunes or OTT providers like Netflix. By getting into bed with TV providers to sell an overpriced TV at a reduced price by pimping TV subscriptions, Apple would be turning their backs on the very elements of their media business that made them so popular. And as JF said, what TV provider is going to sell and promote a product that gives easy access to iTunes/Netflix etc., the very things they’re trying things like UBB to curb? Right now, you can buy any HDTV of your choosing, spend $100 on an Apple TV and have a full-fledged media experience. With the exception of the iSheep who buy anything with an Apple logo, I think selling a device that’s basically that stuff integrated at a much higher price will be a tough pill to swallow. My Mom wants to finally replace her old tube TV this year but she also wants to “cut the cord” at the same time and if an Apple television requires you not to if you want to pay a realistic price for it, I think that’s a bad move.

    There are definitely parallels to Dyson that can be made here but the difference is that Dyson did something no one else had (or can thanks to patents) do. HDTVs have many standards Apple would have to adhere to in order to make their product viable so where they would have to innovate is in the UI and overall design experience. Is that going to be enough to convince someone to spend $1,000 on a TV that aside from that, has the same features as one worth half as much? Maybe but I’m not sure. Apple has managed to convince people to overpay for Macs for years now but TVs are more ubiquitous. If they can shake up the space in some way, more power to them but this is a bigger gamble that the iPhone and iPad were.

     
  5. craigbamford

    May 24, 2012 at 8:10 pm

    This isn’t the early 2000s, Peter. Yes, Dyson pulled it off…but he did it in an entirely different economic climate. It’s pretty unlikely that people will be either willing or able to replace perfectly good (and often fairly new) LCDs with a new Apple one just because somebody called it “Magical” on a black stage.

     
    • petenowak2000

      May 24, 2012 at 8:57 pm

      Well, people are gobbling up $500 fans in this economic climate, aren’t they?

       
 
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