How Apple could sell millions of Apple TVs this fall: the iPad 2

Along with an enormous lead in apps, one of the major software advantages of the iPad at this point is AirPlay, and with iOS 5, that advantage will be expanded to include wireless mirroring of the iPad 2 to a TV, which many people are going to love.

Of course, there is a catch – an iPad and a TV aren’t enough – right now, you need to spend $99 on an Apple TV box for any of this to work. Now, if the Apple TV was a slam dunk device, that extra $99 probably wouldn’t be much of an issue.

Frankly though, the Apple TV is pretty limited, especially compared to the cheaper Roku, or more expensive – but vastly more useful/powerful – Xbox 360 and Playstation 3. Basically, everything the Apple TV can do, the Roku/Xbox/Playstation can, with the exception of AirPlay and the soon to be released wireless mirroring (just a reminder, wireless mirroring will only work with the iPad 2, just as the current wired mirroring only works with the second gen device).

So unless you are a dedicated Apple enthusiast that does all of their movie viewing through iTunes (which is expensive compared to say Netflix), with the exception of AirPlay, there really isn’t much need to choose the Apple TV over the Roku, or if you’re even a casual gamer, to move up a price point to the Xbox or Playstation gives you more entertainment options (and with the Xbox 360 you can use the Kinect, which we’re big fans of).

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Obviously, Apple knows that AirPlay is an advantage for the iPad 2 over other tablets, as AirPlay is heavily featured in iPad commercials. Also, the ever-increasing number of AirPlay enabled apps is just starting to hit a tipping point – expect a ton more very soon. That said, those commercials are iPad commercials not Apple TV ones, and the Apple TV is just a blip on the Apple revenue sheet, so we see Apple as having a problem here.

There have been a lot of rumors of a true Apple Television – screen and all – but again, we’re guessing here that unless you’re an Apple enthusiast (or Apple does something truly revolutionary) you’ll probably be just fine with any of the TVs you can pick up at Best Buy today – so we don’t really see the Apple Television as the thing that will sell iPads – and that’s what we’re trying to get at – how can Apple further drive iPad sales (if that is even possible)?

Here’s a suggestion: either when iOS 5 hits this fall (along with a new iPhone perhaps?) or perhaps more likely, for the holiday season, Apple should start bundling the current Apple TV box with all iPads.

It’s really pretty simple – the Apple TV right now is an iOS device accessory. At the very least, Apple could offer the Apple TV for half off ($50) with the purchase of an iPad or the activation of an iPhone 5, though we think that just throwing it in would really get Apple onto TVs the fastest, and make AirPlay a true differentiator. There is certainly precedent for this bundling – Apple has previously thrown in the iPod Touch with Macbook purchases for students, and Microsoft is offering a free Xbox 360 with any Windows computer purchase over $699 (Do you think that’s a coincidence to what we’re talking about here? Microsoft is making a very smart play).

If Apple does release an Apple Television this fall, some of this might change – heck, perhaps they could bundle a free iPad 2 in with an Apple Television purchase (ok, probably not) – but one thing is for sure: unless Apple makes some kind of effort to closely tie sales of the Apple TV to sales of the iPad 2 and iPhone 5, it is missing out on its best opportunity to become the entertainment hub of millions of living rooms, the current holy grail of consumer electronics.