Analyst Says Apple-Branded TV Waiting for Content

| Apple Stock Watch

Apple TV?
An Apple-branded TV is being held back not by technology or software, but rather content, according to Sterne Agee analyst Shaw Wu. Responding to new speculation about an Apple TV set sparked by a quote from the late Steve Jobs, who told biographer Walter Isaacson that he had “cracked the code” for making an easy-to-use interface, Mr. Wu said that his industry checks support an Apple TV, but that the company is still working on content deals for the device.

“From our understanding,” Mr. Wu told clients in a research note obtained by The Mac Observer, “what is holding back a ‘real’ Apple TV from shipping are content partnerships and licensing terms that still need to be ironed out.”

He noted that Apple has plenty of movies and TV shows available for download through iTunes, but, “What’s missing is live broadcast television.” He argues that if Apple could allow people to dump their satellite or cable TV service, the company would have yet another disruptive product on its hand.

In that getting those content deals has been tricky heretofore, Mr. Wu said that there was no way to pinpoint an exact date for when Apple might introduce a TV set. Apple has been negotiating with Hollywood for years on these things, and even with all of Apple’s massive iTunes exposure, content has come and gone from the iTunes Store regularly.

For instance, Apple introduced TV show rentals in September of 2010, but pulled them in August of 2011. Along the way, Fox and ABC were quick supporters, while Time Warner and NBC Universal both gave the service a thumbs down.

In November of 2009, another story had Apple trying to shop its Apple TV settop box as a TV service that would compete with cable companies. At the time, some network executives were reportedly interested in the idea, but they were all afraid of upsetting the apple cart (pun intended) when it came to their existing business models and licensing agreements with cable companies.

Mr. Wu wrote that, “According to industry sources, [Apple] would love to offer users the ability to choose their own customized programming, i.e., whichever channels/shows they want for a monthly subscription fee. This is obviously much more complicated from a licensing standpoint. And in our opinion, this would change the game for television and give AAPL a big leg- up against the competition.”

He added, “Because of the high dependence on content providers, we believe exact timing of a ‘real’ Apple TV shipping is difficult to pinpoint.”

The analyst maintained his “Buy” rating on shares in Apple, as well as his $500 price target.

AAPL ended the day lower at US$397.77, down $8.00 (-1.97%), on moderate volume of 15.4 million shares trading hands.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

Comments

Lee Dronick

An Apple-branded TV is being held back not by technology or software, but rather content

Yeah, theses days there isn’t much on that is worth watching.

He noted that Apple has plenty of movies and TV shows available for download through iTunes, but, ?What?s missing is live broadcast television.? He argues that if Apple could allow people to dump their satellite or cable TV service, the company would have yet another disruptive product on its hand.

I am surmising that content would come via our internet service. There is data cap consideration. I have AT&T DSL and they are always hounding me about getting their Uverse service and they may not like the competition from Apple.

serandip

What Apple has could be a TV with Siri built in. 

Would make the TV very easy to use.  I could imagine asking the TV “Siri when is the next episode of castle on” or something to that effect, and then asking for the episode to be recorded.  That would make using a TV easy.  May be even get rid of the whole remote.

skipaq

There isn’t a thing on the networks that I find worth my time watching. A-la-carte would be good for us because we would choose the lowest tier and make a few choices. All the junk from CNN, ABC, CBS and NBC would be gone. A lot of other junk cable networks would also be gone.

CCardona

There isn?t a thing on the networks that I find worth my time watching.

Well then, skipaq, I think you are in the minority. And there’s nothing wrong with that, but I want to watch the World Series, and the Brian Williams (NBC) News, the local news and weather, and even CNN and MSNBC (they’re helpful during a crisis). And of course PBS.

Unless a new Apple TV can give me the couple of hundred Comcast channels, in HD, that I like, including all my local channels, I’ll just keep my 2 current Apple TVs.

skipaq

@CCardona, LOL. You are right; I’m in a very small minority probably. But I can get local news, weather over the net right now. There are no local major sports leagues here; but I would need to pick the Red Sox and Patriots somehow (preferably over the net via iTunes.) The rest I would just like to be able to pick and choose as I do with some over iTunes.

Lee Dronick

CCardona and skipaq, yes we all have different tastes in the TV shows we like to watch even if we don’t see the attraction people have to some programs. Same for gadgets and operating systems, some like Android, some like Windows, and some like OSx and iOS.

Wouldn’t it be nice when channel surfing if could program the TV/receiver to skip or otherwise not display the channels we don’t want to see. A user setting so that I can click up from MSNBC to Turner Classic Movies and never see QVC or Fox News. The cable TV companies say that don’t want to offer ? la carte because popular channels subsidize the less popular ones, so why don’t I have more arts programs?

Terrin

I cut the cable. I have AT&T DSL as well. I pay $26 a month. I subscribe to Netflix and Huluplus, which are both streamed to my X-Box 360. I have the ESPN application on the X-Box that streams tons of free sporting content. Occasionally, I rent a Red Box movie and check out content for free at the library.

The World Series and other big Sporting events are either on the ESPN application or broadcast in HD for free over the airwaves.

I also can watch content from my Mac on my HDTV through the display port.

I really do not miss cable, and I have not hit my data cap. My problem with cable was every six months they’d want to rise the price or keep it the same, but give me less. On top of that I would always be looking for something to watch.

Now I pay half and except for a rare local college football game, I have never missed any content.

The content holders are silly for not supporting efforts like Apple because people like me might be the minority, but we are a growing minority. As the economy continues to sink, I suspect even more people will ditch expensive TV services.

Why should people have to pay for 100 channels when they only watch five?

I am surmising that content would come via our internet service. There is data cap consideration. I have AT&T DSL and they are always hounding me about getting their Uverse service and they may not like the competition from Apple.

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