Apple Still Can't Figure How To Break Into The Television Market

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Tim Cook

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Apple CEO Tim Cook

The latest report on Apple's efforts to do something, anything to shake up our TV-watching suggests Apple is just as lost as ever in the TV market

Quartz is reporting that Apple is considering bypassing the cable companies, and just getting content companies like ESPN, HBO, and Viacom to do applications for an Apple television.

In this way, Apple basically becomes a cable company. It charges for channels, and you pay. 

Apple can't get every single channel, but it probably doesn't need all channels. It just needs a few good ones, and that would be enough to sate consumer demand. If the product worked, then other channels could come aboard. 

It's an interesting idea, but it's unclear if it's something people really want.

People will still have to pay for an Internet connection, and presumably it will be an expensive, high-speed connection to support an Apple-based video streaming service.

If they opt for Apple's version of TV plus Internet, it might not save them any money. So, unless Apple has some heart-stoppingly great product, they'll probably stick with their current cable, or fiber, or satellite TV package. 

Apple seems to recognize the flaws in getting a couple of TV apps, because Quartz also reports that it still wants to work with cable companies.

Ideally, you'd plug your cable connection into the Apple television and voila! you'd get a wonderful Apple-ified version of TV. 

Cable companies, however, aren't keen on handing over their interfaces and consumers to Apple. Understandably! Who would trust Apple with their customers? 

And even if Apple got a few cable companies, it's facing a highly fragmented market. It's one thing to get Time Warner Cable on board. But, then it needs Comcast, Verizon FiOS, and all the other companies around the globe. 

And for what? The TV market is not like the phone market. TVs are replaced every 6-8 years, and Apple TVs will not sell in the same volume. 

So here we are. Apple wants to do something. But it seems like it's stuck. It can't get cable companies on board. It can't get content companies totally on board. 

Maybe something will crack and it will all magically fall into place, but we haven't seen a single report to suggest Apple is any closer to a television today than it was four years ago when Piper Jaffray started floating the idea of television from Apple

As a parting shot, here's the best, and really only thing you need to know about the TV market

It comes from Steve Jobs in 2010:

"The problem with innovation in the television industry is the go to market strategy.

The television industry fundamentally has a subsidized business model that gives everybody a set top box for free, or for $10 a month. And that pretty much squashes innovation because no one is willing to buy a set top box. Ask TiVo. Ask Replay TV. Ask Roku, ask Vudu, ask us, ask Google in a few months. Sony's tried, Panasonic's tried, we've all tried. So, all you can do is add a box onto the TV system.

You can say … I'll add another little box with another one. You end up with a table full of remotes, cluster full of boxes, bunch of UIs. The only way that's ever gonna change is if you really go back to square one and you tear up the set top box and design it with a consistent UI and deliver it to the customer in a way they're willing to pay for it. Right now there's no way to do that. So that's the problem with the TV market.

We decided, do we want a better TV or a better phone? The phone won out because there was no way to get it to market. What do we want more? A better tablet or a better TV? Well, probably a better tablet. but it doesn't matter because there's no way to get a TV to market. The TV is going to lose until there is a viable go-to-market strategy, otherwise you're just making another TiVo.

That make sense?

It's not a problem of technology, it's not a problem of vision, it's a fundamental go-to-market problem.

There isn't a cable operator that's national, there's a bunch of operators. And it's not like there's GSM, where you build a phone and it works in all these other countries. No every single country has different standards. It's very 'tower of babble-ish', not that's not the right word. Balkanized. I'm sure smarter people than us will figure this out. But when we say Apple TV is a hobby, that's why we use that phrase. "



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