Apple exploring idea of set-top box; Cable operators not fully on board – Report

Thu, Aug 16, 2012

News, Rumors

With all of the hype and discussion surrounding the impending release of the iPhone 5, we haven’t heard much of anything about Apple’s long-rumored HDTV plans.

Indeed, while many previous reports claimed a late 2012 release was in the works, rumblings from the supply chain in that regard are conspicuously silent.

But that’s not to say that Apple isn’t always up to something.

The Wall Street Journal reported yesterday that Apple, while perhaps in conjunction with its ideas for an integrated HDTV, has been in talks with a number of cable operators regarding the prospects of releasing a set-top box that would be able to run live television and other content.

The report notes that no deals have yet been struck, with some speculating that cable operators are wary of letting Apple securing a foothold in the Cable TV business after it saw the power it accumulated in the music business.

Apple would also need to persuade significant numbers of consumers to buy a set-top box for what could be hundreds of dollars rather than rent one from their cable operators for $10 to $15 a month. Electronics makers such as TiVo Inc. and Samsung Electronics Co already sell set-top boxes, so far without making a big impact on the market.

The talks illustrate that Apple is seeking a less radical path to expand in television than it has contemplated in the past, namely teaming up with existing service providers rather than licensing content to compete with them directly.

It remains unclear if the set-top box Apple is trying to pitch is a variation of its Apple TV or perhaps something much more sophisticated. and expensive.

Notably, one person familiar with Apple’s plans explains that Steve Jobs a few years ago wasn’t too keen on the idea of Apple building a set-top box because of the way cable operators are set up in the US where there aren’t a few large ones with national reach. On the contrary, there are a number of regional cable providers that each “serve only defined geographic territories.”

The two sides have danced around each other for years, say people familiar with the cable companies’ thinking. Cable operators in the past were worried that Apple could erode their relationship with their customers if Apple had a role with the box.

Cable executives have also said that historically weak sales of the Apple TV meant striking a deal to put live programming through the box hasn’t been a priority. Operators have put more emphasis on apps for the popular iPad tablet.

Well either way, Apple is certainly keeping an eye on the space and we’d imagine they’re not going to pounce until they have something that “just works”.


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