The holidays are a season when people believe in the impossible. But just as a fat man and a string of reindeer criss-crossing the globe overnight is a stretch of the imagination, so is the belief that Apple is about to get into the TV business. Like children wanting to believe, analysts have renewed speculation that the Cupertino firm is set to enter the fractious TV sector.
Not so fast, says one season observer. What some on Wall Street interpret as the “imminent launch” of an HD TV bearing the Apple logo likely is the iPhone maker simply exploring the cable television terrain ahead of a new product…
AllThingsD’s John Paczkowski wrote Friday:
If Apple were close to launching a new service, it would be in touch with TV programmers, and we haven’t heard anything along those lines.
As iDB reported yesterday, Jeffries & Co. analyst James Kisner described how an Apple TV device was “imminent”, based on word that at least one North American cable provider is estimating how much bandwidth an Apple gadget would require of their network.
Hold your horses, Paczkowski warns.
“There are still a lot of missing pieces here”, he writes.
Rumors have floated for years that Apple was on the verge on dipping its toes into television. But one plus one does not always result in two. That cable operator operator Kisner pointed to could simply be doing “due diligence” – making sure his network is ready should Apple ever actually want access.
Still, Apple has been talking with “a few large cable operators” in the U.S. concerning a “new TV product,” according to the writer.
That’s a far cry from Apple preparing to enter a commoditized market where profits are slim, if any. Besides, Apple itself has thrown a wet blanket on the whole idea.
In August, executive Eddy Cue called developing a stunning TV user interface but being locked out of programming an “incomplete solution”. Apple CEO Tim Cook at the D10 conference this summer said Apple TV sales doubled, but the company insists of calling the device “an experiment”.
For analysts, who see an Apple TV invigorating sluggish demand for television like catnip for investors, the dream just won’t die. Like the Chicago Cubs, there’s always Next Year. Earlier this week, Morgan Stanley’s Kat Huberty told clients she expects Apple will launch an Apple TV either in 2013 or 2014.
But think for a moment.
Why would Apple want to get into such a divisive market?
Without the help of content owners, Apple is forced into creating a set-top box.
To get programmer’s go-ahead would likely cost a great amount of licensing fees and other financial incentives which would eat into profit. The problem with television is not like that of cell phones or the music industry.
Programmers are thriving.
If network viewing is down, they’ll go to pay-per-view.
Building an Apple TV without the programming is, as Cue said, an “incomplete solution.” But then, again, in fairy tales, people live happily ever after.
What do you think?