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.