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TMO Exclusive - Analyst Denies TiVo/Apple Report; Rumors Abound
by , 2:45 PM EST, February 24th, 2005
A report of an impending buyout of digital video recorder (DVR) maker TiVo by Apple Computer was denied Thursday by the analyst quoted in a recent story by the Reuters news agency. Despite the denial, shares of TiVo (TIVO) were up for a second straight session Thursday amid speculation.
Steven Kroll Jr., an analysts with Monness, Crespi, Hardt & Co., told The Mac Observer he did not confirm to Reuters that there were plans for the iPod and Mac maker to buy TiVo, but that there were widespread rumors of such a deal.
Mr. Kroll is quoted as saying, "What we hear on the street is that Apple is interested in their business and that they are a takeout target." Mr. Kroll told TMO he simply repeated the reported rumor which had been broadcasted for days on the financial news network CNBC and that he is not aware of any deal in the offing.
The brokerage firm Smith Barney said Thursday it is "highly unlikely" Apple will acquire TiVo.
"It appears as though Apple want to stay focused on selling select proven products (e.g. iPod) rather than gambling on unknown initiatives," a commentary obtained by TMO from Smith Barney stated. "Second, Apple indicated that the DVR market seems to be a commodity whereby all players will eventually have similar hardware and software longer term, which means that the DVR market really boils down to marketing and branding. Apple clearly already has a strong brand and would not gain much from acquiring TiVo. If Apple were to get into the DVR market, we believe they would build a proprietary product."
While the TiVo has become the Macintosh of the DVR market, with its users often described as die-hard and fanatical fans, the company has been viewed harshly by Wall Street because of its inability to grow its subscriber base fast enough to become profitable.
Other companies, including media giants Time Warner and Comcast, and its erstwhile satellite TV partner DirecTV have also been discussed as potential suitors for TiVo in recent months.
TiVo CEO Mike Ramsay, who recently announced he would step down from that position, has repeatedly said his company was not for sale, but the company's low market cap of $354 million has fueled takeover speculation.
Observer Comments
In my opinion, TiVo is the best thing since the Mac. Because of piles of work and limited time, I barely ever watch TV. Thanks to TiVo, I can sit down Friday night and watch the shows I missed over the week.
I have two TiVos. How I ever lived without even one, I'll never know.
I hope TiVo isn't going anywhere. Last thing I want to do is have to go out and buy a Windows Media Center. 
QuoteMace wrote:
Highly unlikely that Apple will acquire TiVo. Subscribers of TiVo services hope that someone will acquire TiVo so that TiVo will survive. IMHO: TiVo is becoming as irrelevant as pure PDAs.
Careful there...that's what many 'pundits' were saying about the Mac back in '98.
Perhaps TiVo does need something else...a marriage with Apple and TiVo to create a Media Center would have quite the appeal...
Quotepourhadi wrote:
In my opinion, TiVo is the best thing since the Mac. Because of piles of work and limited time, I barely ever watch TV. Thanks to TiVo, I can sit down Friday night and watch the shows I missed over the week.
I have two TiVos. How I ever lived without even one, I'll never know.
I hope TiVo isn't going anywhere. Last thing I want to do is have to go out and buy a Windows Media Center.
But could you say the same thing about a DVR from a vendor? That's the important question. It's not whether TiVo has a good product or not, it's whether they can differentiate themselves enough from the competition and grow subscriber base enough in face of increasing competition to become profitable.
Apple's purchase of TiVo would make about as much sense as HP's purchase of Compaq, which viewed in hindsight was a huge mistake. Apple wouldn't get anything out of the deal they couldn't develop themselves. TiVo's most valuable asset is their brand name, and if you recall, Apple's got a pretty good brand name already.
Thu Feb 24, 2005 6:16 pm Subject: I;ve had a Cable DVR and TiVo and there is a HUGE difference
Thu Feb 24, 2005 6:20 pm Subject: Illuminate the ignorant
check out 
movies, etc etc... and of course no adult channels
QuoteI get it. Apple and Proctor & Gamble-Gillette should merge.Anonymous wrote:QuoteGuest wrote:
Oh, let's see Apple for the living room. Do you need Apple to do everything for you? How about an Apple branded toothbrush? An Apple branded dishwasher? An Apple etc,etc.
i would like said toothbrush if it had 1GB of flash memory and also doubled as a mp3 player
Fri Feb 25, 2005 6:03 pm Subject: It might be a good move...
Apple would acquire the TiVo brand name if it bought the company. Apple could keep it a separate company and provide capital for it to grow. Apple would gain any technology ideas that it doesn't already have in the area of digital video. Apple would acquire the customer base of the existing TiVo subscribers and add to the iPod "halo" effect (TiVo halo effect anyone?). If TiVo is a deadend technology (highly debatable) then Apple would certainly have ideas for what to do to get it on a new road. After the digital audio revolution what's next? Digital video. Apple certainly has some sort of plans for digital video, they were way ahead on digital audio with the iPod/iTunes products. There has to be some sort of hardware device for digital video, SJ has said that video doesn't make sense in a "pod" pocketable form factor and I agree with him on that. The movie industry is looking for an answer for digital video.
If TiVo is looking to be bought out then why shouldn't Apple buy it? Other then the money lost from their cash reserves.
Fri Feb 25, 2005 6:27 pm Subject: Apple's New Strategy
Quoterkfoster wrote:
Apple would acquire the TiVo brand name if it bought the company. Apple could keep it a separate company and provide capital for it to grow. Apple would gain any technology ideas that it doesn't already have in the area of digital video. Apple would acquire the customer base of the existing TiVo subscribers and add to the iPod "halo" effect (TiVo halo effect anyone?).
Apple renames the Switch Campaign "the halo effect." "By buying TiVo, Apple increases it's halo effect," the AppleScripted MacTrons say.
Sat Feb 26, 2005 4:36 pm Subject: Don't forget to set your Tivo for the new comedy show …
Sat Feb 26, 2005 5:14 pm Subject: Re: Don't forget to set your Tivo for the new comedy show …
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