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Apple in Talks with U.S. Cable Companies to Use an Apple Set-Top Box for TV

According to the Wall Street Journal, Apple is in some talks with U.S. cable companies about using their ambitions to get into your living room:

Apple Inc. is in talks with some of the biggest U.S. cable operators about letting consumers use an Apple device as a set-top box for live television and other content, according to people familiar with the matter.

The talks represent Apple’s most ambitious crack at infiltrating the living room after years of trying.

Apple doesn’t appear to have reached a deal with any cable operators. One obstacle may be the reluctance of operators to let Apple establish a foothold in the television business.

The challenge with a set-top box? Trying to persuade consumers why they need yet another device in their entertainment rooms. But, if Apple can create something worth buying you can bet people will jump on it.

Apple’s plans are to build a set-top box that cable operators would distribute to customers and also service, similar to what we have seen with the iPhone and wireless carriers.

As for an actual Apple television? This supposed set-top box could be built-in one day, according to the WSJ:

Two people briefed on the matter said the technology involved could ultimately be embedded in a television. Apple has worked on prototypes for televisions in the past, according to people briefed on the projects.

The report goes on to note Apple had planned to build a cable set-top box more than two years prior to the release of its existing Apple TV, but then CEO Steve Jobs shut down the idea. He believed cooperating with cable companies would not work because they didn’t have national reach. Plus, most TV content was owned by entertainment companies and not cable companies.

The Journal notes both Apple and cable companies have had sporadic talks for years, with the latter worried Cupertino would disrupt the existing relationship they have with customers. These same companies have put more effort into releasing iPad apps as weak sales of the Apple TV did not make the idea a priority.

Moreover, the 30% cut Apple wanted in the past for set-top box transactions also dissuaded the cable companies. Apple has apparently wanted to be an exclusive distributor of set-top boxes using IP technology, with the operators servicing the box. This idea would reduce the capital required by cable companies to spend on hardware, and also assist in retaining customers as they would be able to view both regular cable TV and internet video with the said device.

Back in February, it was reported that Apple was in talks with Rogers and Bell over a supposed TV partnership, that involved an ‘iTV’. Could this be related?

One thing is for sure, with the ‘iron grip’ the cable industry has on its existing customers, it will take Apple a long time to get the relationship it desires. Once that is possible, you can expect some disruption caused by Apple in the TV markets.

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • K3

    That relationship it desires might not be far off- comparing the barrage of “deal offers” that have come out of Shaw to the cost of what internet,tv and phone ran each month 5 years ago the company almost looks a little desperate for new customers.
    If this is any sign of what it might be like across the border, now might be the time that these providers are willing to work with Apples agenda to take over the world ;).Cant help but wonder how much impact, if any, services like Netflix have had and if that now might be a benefit to Apple with a cable offer.

  • http://www.iphoneincanada.ca Gary

    The problem lies with the cable companies. They know those who like to watch live TV will pay for it. By allowing Apple to enter the picture, that takes away their power to control the customer even more.

    Look at HBO for example. You only can watch HBO if it’s part of your existing cable subscription, via an add on.

    Apple here looks to be working alongside companies to have an Apple branded cable box. Now that would change the game because existing cable box user interfaces are garbage and archaic. Definitely not user friendly at all. Link this box with iTunes and more? You have an all-in-one TV solution.

  • 350Zed

    I grew tired of waiting for Apple to get serious about the TV game, and swapped my Apple TVs for Roku boxes.

    #neverhappier

  • hub2

    The current AppleTV has a mere 8GB of storage. With the OS installed, you can’t store content on it, it’s just a huge buffer.

    A hypothetical AppleTV set-top box would have to allow PVR, and not just “pause live TV” but recording shows for future viewing. Without that feature AppleTV has no hope of replacing PVR set-top boxes, just the cheaper no-recording ones.

  • K3

    I agree with archaic and see what you’re saying with the add ons. It feels like cable is the last big one for change out of movie,music & print industries. Maybe this will also see the CRTC broaden it view on what can and can’t be allowed in Canada?

  • ThatGuy

    The future is not pvr, but on demand. IMO

  • hub2

    Not for awhile yet. I like the *idea* of on-demand, but one good thing about cable is that stuff you didn’t know existed (so couldn’t have searched for) comes to you, and you can record it for later. I come across many of these while guide-surfing. Many of these are documentaries, not movies or TV shows, so forget about finding them on Netflix.

    A few are in the iTunes store, some are too pricey, some aren’t available in HD like the broadcasts are.

    Not that I’m a cable nut; I’m probably cutting it in a few months and go OTA + Netflix or something, just pointing out part of cable I do like.