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Apple Exploring Options for New Apple TVBy Mark Long
Posted: August 16, 2012 1:28pm PDT
Apple is in talks with the nation's top-tier cable TV providers about bringing their programming to an Apple Television device, according to sources familiar with the discussions cited Thursday by The Wall Street Journal.
However, it is unclear whether the iconic device maker will be able to convince U.S. cable TV giants such as Time Warner and Comcast that adopting Apple-branded set-top-boxes would be in their best interests given the negative impact that Apple's iTunes Store has already had on the U.S. music industry.
The iconic device maker already sells an Apple TV player for streaming high-definition (1080p) video clips, live events and on-demand movies from iOS devices via partners such as Netflix and Hulu Plus as well as several major league sporting event providers. Users also can select from the 15,000+ movies and over 90,000 TV episodes available for purchase at Apple's iTunes Store.
Though Apple has not been heavily promoting its current Apple TV gadget, the company sold 1.3 million units in its latest business quarter -- a 170 percent jump from the year-earlier period.
"It brings our fiscal year [shipment total] to 4 million units, which is pretty incredible," Apple CEO Tim Cook told investors last month. "It's still at a level that we would call it a hobby but we continue to pull the string to see where it takes us."
Analysts Anticipate mid-2013 Launch
The $99 gadget, which ships with a dedicated remote control, connects to the user's TV set over a HDMI cable and via Wi-Fi (802.11n) to the user's iOS device. What's more, iOS device users also can download an app which will enable their iPhone, iPad or iPod Touch to double as the player's wireless remote control.
Though Apple TV unit sales to date have been tiny in comparison to the shipment numbers posted by Apple's better-known iconic devices, Cook told industry analysts that Apple was not a company that keeps projects around that the company's executives don't believe in.
"And so, there's a lot of people here that are believers in Apple TV and we continue to invest in it," Cook said.
Some industry observers believe Apple should arrange for TV makers to embed its Apple TV technology into their next-generation products while others envision the iconic device maker launching its own lineup of Apple Television models.
In an August survey of 200 U.S. consumers, 49 percent of the respondents "claimed they were interested in buying an Apple Television, which we expect to be released in mid to late 2013," noted Piper Jaffray analysts Gene Munster and Douglas Clinton.
Apple's Price Hurdle
According to Piper Jaffray, 29 percent of the respondents who had indicated they were not in the market for a TV claimed they would enter the market if Apple were to release an actual television -- with 21 percent attributing their heightened interest to Apple's ecosystem.
"[This] shows how powerful the Apple ecosystem has become," Munster and Clinton wrote in an investor note. "Apple is becoming less a product and more of a platform company that consumers find increasingly more difficult to leave."
When it comes to winning over consumers, however, Apple's biggest hurdle is price. "While the concept of an Apple Television generated significant interest, only 12 percent of the interested respondents said they were willing to pay the $1500 estimated retail price," Munster and Clinton said.
On the other hand, the investment firm's analysts noted that gaining even a 10 percent share of the U.S. TV market would provide Apple with a notable bottom-line boost. "TV sales would still add about 4 percent to our financial year 2014 revenue estimates [for Apple]," Munster and Clinton said.
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