Analyst emerges from meeting with Apple executives, says HDTV is unlikely in the near-term

Sat, Aug 25, 2012

News, Rumors

There have been a tremendous number of reports over the past week or two all pointing towards Apple taking an increasing interest in the TV space. Most of the rumors in that regard have touched on Apple’s interest in rolling out a set top box, though there have also been some rumblings – yet again – of Apple’s alleged interest in pushing out their own HDTV.

To that end, Fortune relays an analyst report from Andy Hargreaves of Pacific Crest. Hargreaves recently met with Apple executives Peter Oppenheimer and Eddy Cue this past Wednesday and came away from the meeting less than optimistic that an HDTV will hit the market anytime soon.

Relative to the television market, Eddy Cue, Apple SVP of Internet Software and Services, reiterated the company’s mantra that it will enter markets where it feels it can create great customer experiences and address key problems. The key problems in the television market are the poor quality of the user interface and the forced bundling of pay TV content, in our view. While Apple could almost certainly create a better user interface, Mr. Cue’s commentary suggested that this would be an incomplete solution from Apple’s perspective unless it could deliver content in a way that is different from the current multichannel pay TV model.

Unfortunately for Apple and for consumers, acquiring rights for traditional broadcast and cable network content outside of the current bundled model is virtually impossible because the content is owned by a relatively small group of companies that have little interest in alternative models for their most valuable content. The differences in regional broadcast content and the lack of scale internationally also create significant hurdles that do not seem possible to cross at this point.

But as Fortune’s Philip Elmer-DeWitt points out, SEC rules prohibit the sharing of inside information that would have a material affect on a company’s share price. That said, even if Apple was working on an HDTV, would it really spill the beans to Hargreaves.

Lastly, it’s not as if it would be out of character for Apple to say they aren’t interested in a product only to release said product months or years later. If you recall, Steve Jobs made disparaging comments about video on the iPod before releasing a video iPod not too long afterwards. Of course, as Hargreaves points out above, entering the TV business is fraught with extremely thorny and intricate problems that puts much of the control outside fo Apple’s hands.

Meanwhile, Jim Darlymple is of the mind that the analyst report is a whole bunch of nonsense.

He came to the conclusion after a meeting with Apple’s Eddy Cue. Basically Cue said Apple will enter a market when its damn good and ready and there are problems with the current television setup. These are the same things Steve Jobs said publicly about television, so there is really nothing new there.

We also don’t know what “near term” is. Next week, next month, two years from now. Hargreaves note just seemed odd to me and not based on anything factual.



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