Lately, the only news Apple has been making involves rumors about its next iPhone and the bitter court case with Samsung. Those stories lack any sort of insight into where one of the wealthiest companies in the country is heading next. But late last night some news broke about where Apple will be focusing its efforts next.
A few weeks ago, I wrote about Google’s foray into the internet provider and television market, Google Fiber. Google is not only providing the fastest internet available, they are offering competitively priced television service to Fiber subscribers. But it looks like Apple is finally going forward with their plans to rival Google in the TV market.
According to the Wall Street Journal, Apple “is in talks with some of the biggest U.S. cable operators about letting consumers use an Apple device as a set-top box for live television and other content.” It appears that Apple is willing to go beyond its current model with Apple TV. Apple TV works with streaming services like iTunes and Netflix, plus it allows integration between iDevices. Getting access to the cable services television program would enhance Apple TV greatly. This possible deal with U.S. cable operators could prove profitable for both sides.
A set-top box that works with cable operators and has the capabilities of Apple TV means that “Apple would be following a similar playbook that it used to transform the mobile-phone industry: convincing existing service providers to marry their service with Apple’s hardware and software.” If that were to pan out as it sounds, it could be extremely successful. Just look at how well the iPhone has been doing for years now.
I definitely think this could work well for Apple. I rely on Netflix and Amazon to deliver any television content I might watch. I hooked up my computer to my TV in an effort to avoid paying a cable service contract, and I have never regretted it. If this set-top box would make a set-up like that easier and more affordable than traditional cable, Apple might have another cash cow on its hands.
Hurdles to Overcome
Apple has some convincing to do, though. As Bloomberg reports, “Cable companies such as Comcast Corp. have invested heavily in developing a new user-interface for their own set-top boxes that they lease to customers for a monthly fee.” In addition to that, Apple would have to convince consumers to pay a few hundred dollars up front versus the cheap leasing fees that cable providers offer for the set-top boxes.
Those issues can prove hard to overcome. What’s more, cable companies are rather protective of their content and the control of their market in general. I wouldn’t call it a hostile market to enter, but Apple is going to need to convince providers that their is a significant amount of money to be made for the necessary deals to go through.
Is Success Inevitable for Apple?
Given Apple’s track record in the last 10 years or so, it seems like they can never fail. They started the year with close to $100 billion cash on hand. They certainly have the ability to take some risks as they move into new markets. The late Steve Jobs claimed “he had ‘finally cracked’ how to build a TV device” when interviewed by the biographer Walter Isaacson.
I guess we’ll see whether that turns out to be true. That is, if those holding the reins at the cable companies open up their content to Apple.
Do you think a new Apple TV would be as influential in the television market as the iPhone is in the wireless market?[adrotate banner=”20″]
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