The
seemingly endless saga of an Apple TV took another twist recently with some fresh reporting from the Wall Street Journal that indicated that Apple was in talks with
cable companies to offer - wait for it - a set-top box.
The
reports are vague, naturally, but the idea appears to be that Apple would offer
a beefed up version of its Apple TV STB provisioned for a cable provider's
services. This functionality may, eventually, be packaged into a TV as well,
but reports from senior Apple executives poured cold
water over the imminent arrival of any iTV.
As the
news filtered out, some observers spied a replay of Apple's successful assault
on the mobile phone business. There, Apple had to swallow some compromises to
gain access to a national cellular carrier but once they established their
foothold, they enjoyed meteoric success. Why shouldn't Apple make a "deal
with the devil" (i.e., the pay TV providers) to gain even wider access
into the consumer's living rooms? Indeed, as the WSJ piece indicated, this is precisely why the cable companies have
been reluctant to engage Apple, noting that "cable operators in the past
were worried that Apple could erode their relationship with their customers if
Apple had a role with the box."
In one
sense, the cable companies have a good reason to worry: on the content side,
they exist solely as a middleman between content owners and consumers. Apple
could encroach on this lucrative turf and cut them out. Cable firms would
simply become "dumb pipes" - a status they fiercely resist.
On the
other hand, an Apple tie-up may serve the pay TV providers well. First, it
would align them with a marquee brand. Today, the STB is an afterthought in the
consumer's mind, but if it had a shiny Apple logo radiating out on it, people
would pay attention. As in the mobile market, offering Apple STBs in a
portfolio could differentiate a pay TV provider. More substantively, Apple's
experience designing compelling interfaces would undoubtedly serve pay TV
providers, who have not exactly knocked that
ball out of the park.
If
Apple sold the device through its online store and other retail outlets, it
would also alleviate the cost burdens for pay TV providers, who need to
underwrite the cost of installing and servicing customer premise equipment.
In
other words, an Apple TV STB may not be as Earth-shattering as the early dreams
of an iTV had promised, but it can still shake things up to benefit of
everyone. Everyone, that is, except the reigning STB champions. Particularly
firms like Motorola and Cisco, who are rumored to be looking for a place to
off-load their STB businesses, an Apple entry into the market could
dramatically alter the competitive landscape. One need only look at what Apple
has done to the fortunes of mobile handset makers like HTC and Nokia to
understand the fear that would grip the STB industry if Apple ultimately does
take the plunge.
