Apple Is Building Something Bigger Than a TV

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Given the beating Apple has taken lately—with many questioning its future—it's important to understand how much television means to Apple. The company's TV plans are much bigger than just selling iTV sets.

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Apple is evolving into an ecosystem, a network that connects to and controls everything from your home to your car to your office. This has the potential to be as impactful as the iPhone and iPad. Today I use iOS apps to control my stereo system (the Sonos) and central air (the Nest). Both work beautifully, and there are more iThings on the way like this incredible door lock.

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Most of all, I want my television to be part of that Apple ecosystem: a thin glass hub integrating cable series, movies, endless utility and gaming apps, YouTube videos, music, photos, e-mails, FaceTime, social media feeds, and more. I want the TV to be my alarm clock, turning from 'Sleep' mode to awaken me with sweet music, a weather report and news, through an app like the newly launched Winston (which is already optimized for Airplay).

Apple needs a television because Apple wants to be a way of life — a management platform to improve the "user experience" of living. As Tim Cook explained last week, Apple is no longer a hardware company.

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Last quarter Apple generated $3.75 billion in software and services revenue. Imagine the potential for that number to expand when developers can create apps that reinvent our relationship with television screens.

Better yet, in the next two to three years, the television commercial model will transition from traditional media buying into a more programmatic ad network similar to the Internet. Ads will not be served to everyone watching a program as they are now. They will be served only to viewers that are in the advertiser's target market. This will be a more effective approach for advertisers, because it will be tied to all of your Apple devices.

So, if you own the Nike Running app, recently looked at running sneakers on, and just Liked a Nike Running post on Facebook, you'll see Nike's latest running-related TV spot and perhaps get a push notification about a pair of sneakers. This advertising transformation can begin as soon as televisions run on iOS and Android.

There's so much value in the ecosystem. The deeper it integrates with your everyday life — becoming the backbone of the "Internet of things" — the more it can drive commerce.

That's why Tim Cook's dipping into his cash pit and making deals with content providers like HBO. That's why television is a market they have "Intense interest in." That's why they're building an ecosystem.

Jason Stein is the founder of social media agency Laundry Service, and a partner in Windforce Ventures, a VC firm focused on social and mobile. Stein owns shares of Apple. Tweet him @jasonwstein.