Apple Inc. (NASDAQ:AAPL) is holding talks with some of the leading U.S. cable operators to enable consumers use an Apple device as a set-top box for live TV and other content, people close to the matter said. The discussions represent Apple’s most striving break at infiltrating the living room after years of trying.
It seems that Apple has not reached a deal with any cable operators. The one problem behind this failure may be the unwillingness of operators to allow Apple a foothold in the television business.
The world’s most valuable company would also need to convince large numbers of consumers to buy a set-top box which could be priced at hundreds of dollars rather than rent one from their cable operators for just $10 to $15 per month. Electronics makers such as Samsung Electronics and TiVo Inc.(NASDAQ:TIVO) are already selling set-top boxes, so far without making a strong impact on the market.
The meetings show that Apple seeks a less radical path to increase its presence in the television business than it has considered in the past, namely collaborating with current service providers rather than licensing content to race with them straightforwardly.
If successful, a deal would score the iPhone maker’s significant move into TV after years of calling it a “hobby.” The issue here is that the $99 Apple TV product is incapable of live network broadcasting and is mostly used for downloading movies and TV shows from the iTunes media store or streaming content from such services as Netflix, Inc. (NASDAQ:NFLX) and Google Inc’s (NASDAQ:GOOG) YouTube.
One problem Apple has faced is that cable companies like Comcast Corporation (NASDAQ:CMCSA) have invested enough money in development of a new user- interface for their own set-top boxes that they provide on lease to customers for a monthly fee.
The report increased concern about Apple’s goals to reach customers in the living room. Piper Jaffray Cos. analyst Gene Munster said that the company has built a prototype TV which will be released before the next year ends.