Some analysts continue to predict that Apple will someday come out with a full-blown television set. But its "grand vision" for TV remains shrouded in secrecy. James Best Jr. New York Times

Apple's move into TV embraces collaborations

Published: Sunday, Jul. 21, 2013 - 12:00 am | Page 1D
Last Modified: Sunday, Jul. 21, 2013 - 8:39 am

When Apple wanted to revolutionize cellphones, it held hands with AT&T. The partners fought endlessly, but the public loved the finished product: the iPhone.

Now, as Apple tries to re-imagine television, it is taking the partnership route again, collaborating with distributors like Time Warner Cable and programmers like the Walt Disney Co. on apps that might eliminate the unpleasant parts of TV watching, like bothersome set-top boxes or clunky remote controls.

Apple's broader strategy – what its chief executive, Tim Cook, recently called its "grand vision" for television – remains shrouded in secrecy, as everything Apple-related tends to be. Some analysts continue to predict, as they have for years, that the company will someday come out with a full-blown television set.

Whether an iTV ever materializes, the company's more modest steps, such as improving the $100 Apple TV box that 13 million households now have and adding access to cable channels through the box, suggest that its strategy stands in stark contrast to Google's, which is contemplating an Internet cable service that would compete directly with distributors such as Comcast and Time Warner Cable.

Reports emerged last week that Google has held talks with several channel owners about licensing channels for such a service, but no deals are within reach.

Apple weighed something similar years ago, but its executives concluded that it should work with the industry's powerful incumbents rather than against them.

"Apple's probably going to have greater access to content by deciding to cooperate," said Natalie Clayton, who oversees digital video research for Frank N. Magid Associates.

Case in point, Apple last month turned on HBO and ESPN apps for Apple TV owners. But those work only for people who have an existing cable or satellite subscription.

Coming next is an app from Time Warner Cable, allowing some of the company's 12 million subscribers to watch live and on-demand shows without a separate set-top box. The app will effectively add an Apple layer on top of the TV screen, providing what its proponents say is a programming guide superior to anything offered by Time Warner.

Apple has talked in-depth with other big distributors about similar apps, according to people involved in the talks. Its intent is to collect a fee from distributors in exchange for enhancing their television service and in that way, theoretically, make subscribers more likely to keep paying for cable.

"They're trying to apply their software expertise, their user interface expertise," one of the people said. (The people, both at distributors and programmers, insisted on anonymity because they said public comments would interfere with the private talks with Apple.) Apple has sought support from programmers as well. It has proposed, for instance, an ad-skipping technology that would compensate networks for the skipped ads by charging users.

While the idea is far-fetched, it intrigued some of the channel owners who were briefed about it and excited Apple followers when it was first reported by technology writer Jessica Lessin earlier this week.

For Apple, further moves into television could neutralize some of the skepticism about the company's future since the death of Steve Jobs in 2011. Investor concerns that the company might not have another iPhone- or iPad-level innovation on the way have dragged down its stock price, which topped $700 for the first time in September but has recently hovered closer to $400.

For the time being, Apple TV is a small part of its business – something best suited to "hobbyists," as Cook put it at the D: All Things Digital conference in May. At that time, he hinted at the opportunity Apple saw in the living room, calling traditional TV watching "not an experience that I think many people love" and "too much like 10 or 20 years ago."

It is easy to see how Apple could help. Products like Apple TV and Roku, which connect TVs to the Internet's wealth of streaming content, have proliferated because the set-top boxes that cable companies supply have not kept up with shifts in consumer behavior. But the streaming boxes remain a somewhat niche technology.

Apple could choose to market its box more heavily, especially as competition heats up from Amazon and other companies. Or it could eliminate the need for a box by building its own TV set.

Reports this week that Apple might acquire PrimeSense, a maker of motion-sensing technology that could be used to control a TV without a physical remote, prompted a new round of guessing.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Brian Stelter





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