Analyst Denies TiVo/Apple Report; Rumors Abound

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 companyis low market cap of $354 million has fueled takeover speculation.