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SAN FRANCISCO (MarketWatch) -- So which semiconductor vendors did Apple Inc. tap for its AppleTV device?
The long list includes Intel Corp., Broadcom Corp., Marvell Technology Group Ltd. and Nvidia Corp.
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AAPL draws from an assortment of chips to allow people to wirelessly stream and store digital content loaded on their iTunes to their televisions. It comes with a 40-gigabyte hard drive that can store 50 hours worth of video, and costs $299. AAPL
The device, which measures about 8 inches by 8 inches and is an inch thick, started shipping a week ago.
Intel is providing the central processing unit, Broadcom is supplying the Wi-Fi chipset, Nvidia is contributing the graphics processor and Marvell Tech is furnishing the hard-disk drive chip, said Prudential Equity analysts, who cracked open the device to value the parts.
The device also uses semiconductor components from Texas Instruments Inc., Samsung Electronics Co., Silicon Image, Cypress Semiconductor and Intersil Corp., some of whom are known suppliers for Apple's iPod music player.
Wall Street estimates vary on the number of AppleTVs to be sold in 2007. Prudential analysts projects unit sales of 800,000, while PiperJaffray analysts forecast 2 million.
"While the AppleTV is a high visibility design win, we do not expect it to change the economic fortunes for most of the suppliers," Prudential analyst Mark Lipacis wrote.
Based on a preliminary analysis, Prudential calculates Intel may book revenue of $42 million from AppleTV shipments this year; Broadcom, $12 million; Nvidia, $11 million; Marvell, $4 million; TI, $3 million; Cypress Semi, $4 million; Silicon Image, $3 million.
Those estimated figures are a tiny fraction of the overall revenue those chip providers record on an annual basis. For instance, Intel reported 2006 revenue of $35.4 billion. Broadcom posted revenue of $3.6 billion, and Nvidia booked revenue of $3 billion. 
Matt Andrejczak is a reporter for MarketWatch in San Francisco.
State of the Art
Published: March 22, 2007
Published: March 22, 2007
Published: March 22, 2007
Published: March 22, 2007
In the technology world, conventional wisdom says that we?ll soon be saying R.I.P. for the DVD. Internet downloads are the future, baby. No driving, no postpaid envelopes. Any movie, any TV show, any time.
Only one problem: once you?ve downloaded the shows to your computer, how do you play them on the TV?
Now, there are people ? at least 12, for sure ? who actually watch movies right on their computers, or who wire their PCs directly to their TV sets.
The rest of us, however, are overwhelmed by cultural inertia. Computers are for work, TVs are for vegging out, and that?s final.
No wonder, then, that when Apple announced Apple TV, a box that can connect computers and TVs without wires, the hype meter redlined with millions of search-engine citations, a run-up in the Apple stock price and drooling analysts.
After many delays, Apple TV finally went on sale yesterday for $300, but there are plenty of companies trying to solve what you might call the ?last 50 feet? problem. A couple of prominent examples: In addition to its game-playing features, Microsoft?s Xbox 360 ($400) performs a similar PC-to-TV bridging function; in fact, it even has its own online movie store. Netgear?s week-old EVA8000 ($350) also joins PC and TV, but adds an Internet connection for viewing YouTube videos and listening to Internet radio.
And so Apple TV has landed. How does it stack up?
In looks, it sits at the top of the heap. Apple TV is a gorgeous, one-inch-tall, round-cornered square slab, 7.7 inches on a side. It slips silently and almost invisibly into your entertainment setup. (You can?t say that for the Xbox, which in comparison is huge and too noisy for a bedroom.)
The heartbreaker for millions, however, is that Apple TV requires a widescreen TV ? preferably an HDTV. It doesn?t work with the squarish, traditional TVs that many people still have.
Apple defends its audience-limiting decision by saying that the future is HDTV; Apple is just ?skating to where the puck is going to be,? as a product manager put it.
Apple TV doesn?t come with any cables. You?re supposed to supply the one your TV requires (HDMI, component video or HDMI-to-DVI adapter). They cost $20 at Apple?s online store.
So what is Apple TV? Basically, it?s an iPod for your TV. That is, it copies the iTunes library (music, podcasts, TV shows, movies) from one Mac or Windows PC on your wired or wireless home network to its 40-gigabyte hard drive and keeps the copy updated.
The drive holds about 50 hours? worth of video or 9,000 songs; if your iTunes library is bigger than that, you can specify what subset you want copied ? only unwatched TV episodes, for example.
At this point, you can play back videos, music and photos even if the original computer is turned off or (if it?s a laptop) carried away. (Photo playback requires iPhoto on the Mac, or Photoshop Album or Photoshop Elements on Windows.)
A tiny white remote control operates Apple TV?s stunning high-definition white-on-black menus, which are enlivened by high-resolution album covers and photos. You can see the effect at apple.com/appletv.
The integration of iPod, iTunes and Apple TV offers frequent payoffs. For example, if you paused your iPod partway through a movie, TV show or song, Apple TV remembers your place when you resume playing it on your TV. Cool.
Although only one computer?s files are actually copied to Apple TV, you can still play back the iTunes libraries of five other computers by streaming ? playing them through Apple TV without copying them. Starting playback, rewinding and fast-forwarding isn?t as smooth this way, and photo playback isn?t available. But it?s a handy option when, say, you want to watch a movie on your TV from a visitor?s laptop.
All of this works elegantly and effortlessly. But there are lots of unanswered questions that make onlookers wonder if Apple has bigger plans for the humble Apple TV.
For example, it has an Internet connection and a hard drive; why can?t it record TV shows like a TiVo?
Furthermore, it?s a little weird that menus and photos appear in spectacular high-definition, but not TV shows and movies. All iTunes videos are in standard definition, and don?t look so hot on an HDTV.
And then there?s the mysterious unused U.S.B. port.
Still, if you stay within the Apple ecosystem ? use its online store, its jukebox software and so on ? you get a seamless, trouble-free experience, with a greater selection of TV shows and movies than you can find from any other online store.
But in Netgear?s opinion, that approach is dictatorial and limiting. Its new EVA8000 box plays back many more video formats, including high-def video; can play the contents of any folders on your Mac or PC, not just what?s in iTunes; offers Internet radio and YouTube videos; and works with any kind of TV. It can even play copy-protected music ? remarkably, even songs from the iTunes store (Windows only).
Unfortunately, this machine (2 by 17 by 10 inches) is as ugly as Apple?s is pretty. Its menus look as if they were typed in 12-point Helvetica. The software is geeky and unpolished; for example, during the setup process, it says ?Failed to detect network? if no Ethernet cable is plugged in, rather than automatically looking for a wireless network.
The Netgear model is also filled with Version 1.0 bugs, including overprinted, blotchy menu screens and incompatibility with Windows Vista. Netgear promises to fix the glitches, but concedes that it timed the EVA8000?s release to ride the wave of Apple TV hype.
The two-year-old Xbox 360 is far more polished. Like Apple TV, it can either stream photos, music and videos (Windows PCs or, with a $20 shareware program, even Macs) or play them off its hard drive.
What?s different, though, is that you can?t copy files to this hard drive over the network; you can download shows and movies only straight to the Xbox from Microsoft?s own fledgling online store. You can buy TV shows for $2 each ($3 in high definition), or rent movies for $4 ($6 for high def). Microsoft movies self-destruct 24 hours after you start watching them. (Apple movies cost full DVD price, but at least you can keep them forever.)
Note, too, that the Xbox?s primary mission ? playing games ? doesn?t always suit music and movie playback. It can?t get onto a wireless network without an add-on transmitter ($100 ? yikes). You can?t control the speed of a slide show or fast-forward through a song.
And in general, the included game controller makes a lousy remote control. There are no dedicated buttons for controlling playback; instead, you have to walk through the buttons on an on-screen control bar to reach, say, the pause function.
And alas, these products can require a journey through the hell of home networking. The Xbox couldn?t get online at first, thanks to an ?MTU failure.? A Microsoft techie in India named ?Mike? claimed that my cable-modem company would have to make a change in my service. (He was wrong; a router setting had to be changed instead.)
When the Netgear EVA8000 couldn?t get on the network, I waited 30 minutes to speak to a technician, who announced that I?d shortly get a call back from a senior tech. Five days later, I?m still waiting. (The solution was to uninstall ? not just turn off ? Microsoft?s OneCare security suite.)
In the end, these early attempts to bridge the gulf between computer and TV perfectly reinforce the conventional wisdom about Apple: Apple TV offers a gracious, delightful experience ? but requires fidelity to Apple?s walled garden.
Its rivals, meanwhile, offer many more features, but they?re piled into bulkier boxes with much less concern for refinement, logic or simplicity.
Put another way, these machines aren?t direct competitors at all; they?re aimed at different kinds of people. Microsoft?s young male gamers probably couldn?t care less that they can?t change the slide-show speed, and Netgear?s box ?is for people who are more experienced,? according to a representative. ?This is not for the random person.?
Apple, on the other hand, is going for everybody else, random people included (at least those with HDTV sets). And that, perhaps, is Apple TV?s real significance. To paraphrase the old Macintosh advertisement, it?s a computer-to-TV bridge for the rest of us.
In the technology world, conventional wisdom says that we?ll soon be saying R.I.P. for the DVD. Internet downloads are the future, baby. No driving, no postpaid envelopes. Any movie, any TV show, any time.
Only one problem: once you?ve downloaded the shows to your computer, how do you play them on the TV?
Now, there are people ? at least 12, for sure ? who actually watch movies right on their computers, or who wire their PCs directly to their TV sets.
The rest of us, however, are overwhelmed by cultural inertia. Computers are for work, TVs are for vegging out, and that?s final.
No wonder, then, that when Apple announced Apple TV, a box that can connect computers and TVs without wires, the hype meter redlined with millions of search-engine citations, a run-up in the Apple stock price and drooling analysts.
After many delays, Apple TV finally went on sale yesterday for $300, but there are plenty of companies trying to solve what you might call the ?last 50 feet? problem. A couple of prominent examples: In addition to its game-playing features, Microsoft?s Xbox 360 ($400) performs a similar PC-to-TV bridging function; in fact, it even has its own online movie store. Netgear?s week-old EVA8000 ($350) also joins PC and TV, but adds an Internet connection for viewing YouTube videos and listening to Internet radio.
And so Apple TV has landed. How does it stack up?
In looks, it sits at the top of the heap. Apple TV is a gorgeous, one-inch-tall, round-cornered square slab, 7.7 inches on a side. It slips silently and almost invisibly into your entertainment setup. (You can?t say that for the Xbox, which in comparison is huge and too noisy for a bedroom.)
The heartbreaker for millions, however, is that Apple TV requires a widescreen TV ? preferably an HDTV. It doesn?t work with the squarish, traditional TVs that many people still have.
Apple defends its audience-limiting decision by saying that the future is HDTV; Apple is just ?skating to where the puck is going to be,? as a product manager put it.
Apple TV doesn?t come with any cables. You?re supposed to supply the one your TV requires (HDMI, component video or HDMI-to-DVI adapter). They cost $20 at Apple?s online store.
So what is Apple TV? Basically, it?s an iPod for your TV. That is, it copies the iTunes library (music, podcasts, TV shows, movies) from one Mac or Windows PC on your wired or wireless home network to its 40-gigabyte hard drive and keeps the copy updated.
The drive holds about 50 hours? worth of video or 9,000 songs; if your iTunes library is bigger than that, you can specify what subset you want copied ? only unwatched TV episodes, for example.
At this point, you can play back videos, music and photos even if the original computer is turned off or (if it?s a laptop) carried away. (Photo playback requires iPhoto on the Mac, or Photoshop Album or Photoshop Elements on Windows.)
A tiny white remote control operates Apple TV?s stunning high-definition white-on-black menus, which are enlivened by high-resolution album covers and photos. You can see the effect at apple.com/appletv.
The integration of iPod, iTunes and Apple TV offers frequent payoffs. For example, if you paused your iPod partway through a movie, TV show or song, Apple TV remembers your place when you resume playing it on your TV. Cool.
Although only one computer?s files are actually copied to Apple TV, you can still play back the iTunes libraries of five other computers by streaming ? playing them through Apple TV without copying them. Starting playback, rewinding and fast-forwarding isn?t as smooth this way, and photo playback isn?t available. But it?s a handy option when, say, you want to watch a movie on your TV from a visitor?s laptop.
All of this works elegantly and effortlessly. But there are lots of unanswered questions that make onlookers wonder if Apple has bigger plans for the humble Apple TV.
For example, it has an Internet connection and a hard drive; why can?t it record TV shows like a TiVo?
Furthermore, it?s a little weird that menus and photos appear in spectacular high-definition, but not TV shows and movies. All iTunes videos are in standard definition, and don?t look so hot on an HDTV.
And then there?s the mysterious unused U.S.B. port.
Still, if you stay within the Apple ecosystem ? use its online store, its jukebox software and so on ? you get a seamless, trouble-free experience, with a greater selection of TV shows and movies than you can find from any other online store.
But in Netgear?s opinion, that approach is dictatorial and limiting. Its new EVA8000 box plays back many more video formats, including high-def video; can play the contents of any folders on your Mac or PC, not just what?s in iTunes; offers Internet radio and YouTube videos; and works with any kind of TV. It can even play copy-protected music ? remarkably, even songs from the iTunes store (Windows only).
Unfortunately, this machine (2 by 17 by 10 inches) is as ugly as Apple?s is pretty. Its menus look as if they were typed in 12-point Helvetica. The software is geeky and unpolished; for example, during the setup process, it says ?Failed to detect network? if no Ethernet cable is plugged in, rather than automatically looking for a wireless network.
The Netgear model is also filled with Version 1.0 bugs, including overprinted, blotchy menu screens and incompatibility with Windows Vista. Netgear promises to fix the glitches, but concedes that it timed the EVA8000?s release to ride the wave of Apple TV hype.
The two-year-old Xbox 360 is far more polished. Like Apple TV, it can either stream photos, music and videos (Windows PCs or, with a $20 shareware program, even Macs) or play them off its hard drive.
What?s different, though, is that you can?t copy files to this hard drive over the network; you can download shows and movies only straight to the Xbox from Microsoft?s own fledgling online store. You can buy TV shows for $2 each ($3 in high definition), or rent movies for $4 ($6 for high def). Microsoft movies self-destruct 24 hours after you start watching them. (Apple movies cost full DVD price, but at least you can keep them forever.)
Note, too, that the Xbox?s primary mission ? playing games ? doesn?t always suit music and movie playback. It can?t get onto a wireless network without an add-on transmitter ($100 ? yikes). You can?t control the speed of a slide show or fast-forward through a song.
And in general, the included game controller makes a lousy remote control. There are no dedicated buttons for controlling playback; instead, you have to walk through the buttons on an on-screen control bar to reach, say, the pause function.
And alas, these products can require a journey through the hell of home networking. The Xbox couldn?t get online at first, thanks to an ?MTU failure.? A Microsoft techie in India named ?Mike? claimed that my cable-modem company would have to make a change in my service. (He was wrong; a router setting had to be changed instead.)
When the Netgear EVA8000 couldn?t get on the network, I waited 30 minutes to speak to a technician, who announced that I?d shortly get a call back from a senior tech. Five days later, I?m still waiting. (The solution was to uninstall ? not just turn off ? Microsoft?s OneCare security suite.)
In the end, these early attempts to bridge the gulf between computer and TV perfectly reinforce the conventional wisdom about Apple: Apple TV offers a gracious, delightful experience ? but requires fidelity to Apple?s walled garden.
Its rivals, meanwhile, offer many more features, but they?re piled into bulkier boxes with much less concern for refinement, logic or simplicity.
Put another way, these machines aren?t direct competitors at all; they?re aimed at different kinds of people. Microsoft?s young male gamers probably couldn?t care less that they can?t change the slide-show speed, and Netgear?s box ?is for people who are more experienced,? according to a representative. ?This is not for the random person.?
Apple, on the other hand, is going for everybody else, random people included (at least those with HDTV sets). And that, perhaps, is Apple TV?s real significance. To paraphrase the old Macintosh advertisement, it?s a computer-to-TV bridge for the rest of us.