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The next Apple TV puts company in rare role: Playing catch-up

Apple's Internet-connected-TV device hasn't been updated in three years. A new box, expected Wednesday, will give Apple fans what they've wanted -- and what everyone else already enjoys.

A new generation of Apple TV hasn't arrived since 2012. CNET

It's a moment the Apple faithful have been waiting for.

Apple is expected Wednesday to unveil the next generation of its streaming-media box, the Apple TV. The device has been idling for three years while the technology giant doted on products like the iPhone and Apple Watch. As a result, Apple will have a bevy of new features to reveal, based on reports about what's coming to the updated version.

The Apple TV is a box you hook up to your television to watch video from the likes of Netflix and YouTube on the TV's screen. Get ready for gaming, according to the reports. Other expected features include being able to speak commands to Apple TV, and search across both apps and channels, which are likely set to multiply with a television-centered App Store.

The catch is that Apple TV's biggest competitors already offer such options.

In the last three years consumer demand and competition have sparked an explosion in both top-notch streaming video and the number of devices that deliver that video to your TV. Companies like Roku, Amazon and Google have introduced new products or upgraded them regularly, all while Apple TV largely sat on the sidelines. If new features for Apple TV, such as gaming, voice commands, universal search and a store with apps, feel like deja vu, that's because you can already find them in other products. Given the rumored price of $150 for the new Apple TV, rivals may also sell devices with similar bells and whistles at cheaper prices.

"What used to be a unique and tight hook for the Apple faithful is now generic," said Paul Erickson, an analyst of connected home devices for market researcher IHS.

This means Apple needs to spring some surprises. The reported new features of Apple TV may not be a complete list of what Apple will unveil on Wednesday when it hosts a fall event traditionally used to introduce new iPhones. Apple may also tweak the known Apple TV features to distinguish itself from competitors that beat it to the punch.

If Apple wants to maintain dominance, the company will need to work at it. Its dallying amid a surge in demand for streaming-media boxes means its status in the marketplace has begun to flag.

One of the first mainstream devices of its kind, Apple TV is a big seller worldwide. Apple has sold 25 million of the boxes in its lifetime, Chief Executive Tim Cook said in March. That beats Roku's 10 million total sold as of last year. Neither Google nor Amazon has released stats for their streaming devices, Chromecast and Fire TV, respectively.

However, Apple TV has been slipping. Last year, its US sales fell to fourth place behind Roku, Chromecast and Fire TV, according to estimates from market researcher Parks Associates. Strategy Analytics, another market researcher, similarly notes that for the first time, Apple sold fewer Apple TVs in the second quarter than it had a year earlier.

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A commanding voice

Siri, Apple's software that responds to spoken commands and requests, is expected to get a lot of attention at Wednesday's event, based on the teaser in Apple's invitation. Apple TV, in particular, is expected to benefit from Siri's smarts. The streaming-media box is said to integrate voice commands, so viewers can simply say what they want to watch without having to toggle to the right app or peck out the name of a movie one letter at a time.

Analysts said the voice commands, which are present in Roku and Amazon Fire TV devices, are one area of streaming-media devices that routinely gets high marks from consumers for improving the experience but that the number of people who actually use the feature remains low.

Strategy Analytics found 20 percent of device owners spoke instructions to their streaming boxes but that they preferred other methods of control largely because the voice commands weren't accurate enough, said analyst David Watkins.

Sales of the Apple TV, the best-selling box cumulatively, have begun to slip behind rivals, analysts say. CNET

Last year, Parks Associates reported an even smaller percentage of streaming-media device owners who use voice controls, putting the number at about 4 percent. Barbara Kraus, director of research at the firm, noted that gaming consoles, not streaming-media devices, are the natural place for spoken commands to break out because video games are more interactive compared with the passive act of watching TV.

Playing the game

Apple TV is also expected to have a refashioned remote control to make the box a contender in video games. That would follow the tack of others, particularly Amazon Fire TV, which has a gaming controller linked to its box. The Apple TV remote is reported to have a trackpad, similar to the surface you touch to move your mouse on laptops, and motion sensors that would allow you to move the remote like, among other things, a steering wheel in driving games.

The strategy of having streaming boxes double as gaming consoles targets the idea that casual gamers might want to bring their smartphone game experiences to the television and don't want to invest in a pricey gaming console like Microsoft's Xbox One or Sony's PlayStation 4.

But the linchpin of attracting people to your device for gaming is, appropriately, what you can play on it.

"It's all about the games," Kraus said. "Gamers...like the right hardware. They want performance. They want immersiveness. But that's still secondary to the game."

Apple already has a universe of games that developers have created for mobile devices like the iPhone, but few are exclusive to Apple. And some blockbuster console-style games, such as Bioshock and Grand Theft Auto, are older titles that have already been adapted to the iOS software expected to run the next Apple TV. Meanwhile, those scattered titles are a speck compared with the catalogs of Xbox and PlayStation.

Searching the universe

Another popular feature on rival devices is universal search, which refers to the ability to find all the options for watching a particular actor or character across a multitude of channels and apps. Roku, which has several streaming-media boxes and sticks ranging from $40 to $100, has generated the most praise for its universal search, said Strategy Analytics' Watkins. That's because Roku doesn't play favorites with the results.

Many of the expected features on the new Apple TV already exist on rivals like Roku and Amazon Fire TV. Sarah Tew/CNET

"The key to universal search is being agnostic," he said.

This may not be the case with Apple TV. Apple may prefer that you buy through its own services, such as iTunes for music and video. When universal search results direct you only to certain storefronts, the feature becomes less useful for consumers.

Apple TV has traditionally excluded media competitors like Amazon, now the home of popular original shows like "Transparent" on its Prime Instant Video service.

A new kind of App Store

Limitations on channel selection have helped undermine Apple TV's stature in the last couple of years, Watkins said. In addition to exiling competitors from the box, Apple has been stingy about how many channels get approved. Apple TV has only about 65 channels, compared with 2,500 on Roku in the US.

The No. 1 reason consumers report choosing one streaming-media device over another is ease of use, but the inclusion of programs that a particular consumer likes and offering more programs overall are reasons No. 2 and No. 4, according to Strategy Analytics.

Apple is expected to have a dedicated App Store as part of the new device, which opens up the possibility for a much greater number and variety of apps. This is also a strategy the company has used for the iPhone and iPad to much success.

The long-awaited update to Apple TV will be affirmation the device is no longer a hobby, as Apple referred to the streaming-media box in its early days. To all of Apple's competitors, though, this has always been serious business.