Global CIO: Is Steve Jobs Blowing Smoke About Apple TV?Global CIO: Is Steve Jobs Blowing Smoke About Apple TV?

1) Set-top boxes. Refuting Jobs' claim that consumers won't pay for set-top boxes, Schwarz contends otherwise and predicts a world of hurt for various industries as a result. "The App Store is the key to the future of the living room," Schwarz writes. "Accessing a network television app that provides an a la carte menu of shows will destroy the cable companies. Gaming apps will destroy the traditional gaming consoles. News apps will destroy websites. Digital distribution of tailored content is a better model. Yes Steve, people will pay for the right kind of set top box."

2) Cable-company partnerships. Schwarz offers these excerpts from Jobs on the difficulty of working with cable companies: "Which is: there isn’t a cable operator that’s national . . . every single country has different standards, different government approvals, it’s very . . . Tower of Babelish." And then he dismisses that objection because, he says, Apple TV should bypass rather than partner with these last-generation bottlenecks: "To bring innovation to the television industry you need to bypass the cable companies. The potential to become king of the living room is a once per generation opportunity and should be more than just a hobby for Apple. The acceleration of technological evolution is something Apple needs to adapt to. Releasing one new product every three years is no longer good enough. The App Store is exploding and Apple has an opportunity to build hardware that utilizes this revolutionary distribution platform. Jobs was recently criticized for the Apple commercial that touted the iPad as a revolutionary product. The real revolution is the App Store."

3) Is TV a hobby for Apple? Saying Jobs is being overly coy on whether this is really a business opportunity for Apple, Schwarz exhorts Jobs to keep thinking big: "Come on Steve. I know a lot of what you said in that interview was tongue in cheek but there is no denying Apple is in the driver's seat to innovate the next big thing. It's time for iTunes to integrate the LaLa streaming technology into music and video which will finally enable Apple TV to provide a user experience worth paying for. Steve needs to rise to the occasion and release an enhanced, cloud based iTunes with new hardware that can stream television shows, movies, and apps onto the television screen. Then we'll see if consumers will pay for a set top box."

Ultimately, Schwarz argues, the crown jewel for Apple is the App Store, and he becomes so gung-ho on this theme that he nearly blasphemes by suggesting Jobs might not be up to that challenge:

"The time has come for Steve Jobs to fully embrace new hardware that effectively leverages app use. If he can't do it, maybe the master of business operations, COO Tim Cook is better suited to lead Apple into this new frontier," Schwarz writes. "The opportunity to leverage the App Store is too massive. Those who assume that Steve Jobs is the only one who can lead Apple are wrong. Leveraging the App Store is more about operations than it is about innovation."

If you're involved in new business models, partnerships, video, or using disruptive approaches to enhance competitive advantage, you should read Schwarz's piece and some of the related articles to which he links. I give him a great deal of credit because while he holds a long position in Apple stock, he's willing to say that while the emperor might not be naked, perhaps his black turtleneck needs to be tucked in.

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