Barclays analyst: Apple will struggle to crack TV business

Barclays analyst Anthony DiClemente “is a media analyst, not a hardware guy, and his report focuses primarily on the reasons it will be so hard for Apple — or anyone — to truly disrupt the TV programming/distribution business,” Peter Kafka reports for AllThingsD.

But here’s some of his speculation about the box, which is similar to other industry guesses:
• He doesn’t think it’s coming in 2012.
• He thinks it will use Apple’s Siri voice control as a ‘groundbreaking interface.’
• He imagines it could sell for $1,500.
• He thinks it could be “so much more than a TV — including gaming, video communication, content delivery, apps, computing and all the capabilities of the current Apple TV.

DiClemente argues “that TV programmers don’t have any incentive to stop selling the bundles they’re already selling for big dollars (in 7 and 10-year deals),” Kafka reports. “The ‘affiliate fees’ that cable providers pay for the bundles are now up to $30 billion a year, or about $30 per subscriber per month. And programmers aren’t going to do anything that weakens that revenue stream.”

Read more in the full article here.

MacDailyNews Take: I’d like to create an integrated television set that is completely easy to use. It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it.Steve Jobs

Related articles:
Steve Jobs’s last great gadget: the all-purpose ‘iTV’ – November 6, 2011
Siri key to rumored Apple television to be announced by late 2012, say sources – October 27, 2011
Four reasons why an Apple television will be the easiest money the company’s ever made – October 27, 2011
Analyst says Apple ‘iTV’ integrated television set coming in 2012 – October 24, 2011
Steve Jobs’ told biographer: ‘I finally cracked’ the secret to an easy-to-use integrated HDTV – October 21, 2011


      1. Well, we may never know for sure until it’s actually announced, but If it does come out, it will blow everything away.

        And considering that just RUMORS of an Apple TV set caused samsung to scramble and release smart TV’s means that TV makers know they will be screwed since they have been very obviously holding back some delicious stuff…

  1. DiClemente is exactly right about programmers’ incnetive to NOT change their business model. Apple will need to develop a typically Apple method to pipe existing content through the Apple TV. Apple will provide a seamless conduit for connecting multiple sources into the Apple TV, potentially utilizing Siri as the interface for output control. No TV hardware is forthcoming from Apple.

    Apple can’t reinvent the broadcasting wheel in this situation. JMO.

    1. but doesn’t IPv6 contain a protocol to really broadcast? If I’m right on this, it would be a way to get all stuff through an Apple TV, without the need for other boxes. Get the free TV stuff through the Apple TV box, everyone will get one, more content will follow, and then it makes sense to get an Apple TV set. With a good UI, of course.

    2. There are a few ways Apple can win at this.
      First the low hanging fruit and the method I like best is go after Motorola directly and provide a cable ready TV that can do all the things that the current Crappy set top boxes can do plus a whole lot more. Cable companies want to be able to compete with each other and will cut each others throats to not be the only company without a service that their customers want. Second Apple could sign up broadcast companies directly and become their own TV provider and compete head to head with the cable companies. The first method is simple as it works with the Cable companies and simply allows someone to get these amazing feature without doing anything but replace their existing piece of crap cable set top box. Most consumers would welcome this. I would go after the board casters directly but that would mean the cable companies can pull a fast one and play with bandwidth for its consumers. So the first seems to give us a foot hold and the later would be where it could go. If Apple had more control they could have more muscle but it might make sense to tone it down on the Gen 1 product. In the end people want their content that they pay for everywhere they want to watch it which includes IOS. I have that now in the form of a bunch of iOS apps but what if Apple had a standard and one app could sew them all together and if that did not interrupt advertising revenue would be acceptable for most open minded Broadcasters. For the rest to hell with them the train is coming get on or move out of the way else enjoy the taste of the train.
      Something Google clearly would not want is to give up Ad revenue. They would not give up that feature..
      Apple would still be able to offer other services and still they could provide their own advertising to consumers in other IOS areas but not compete with the broadcast content providers. Cable companies your days are numbered either way. You under provide, over charge and have little competition. So in a sense out you go. (I can’t wait to see my 190.00 cable bill go away!

      1. I don’t think going after Motorola or any of the cable companies is the winning strategy here. There exists a Tower of Babylon of cable and satellite content providers. Apple doesn’t need to devise a hardware alternative to this. Apple will design a device that won’t be obsolete within two or three years.

        Apple simply needs to design a device that enables consumers to take whatever content they subscribe to and plug it into their Apple TV – or whatever. You eliminate all of the remote controls, all of the programming hassle and end up with one elegantly designed box with which you can control your content.

        Utilizing Siri may be the means Apple is considering for streamlining the interface of all the content. What would be ideal is an Apple box that you use to plug in your satellite, cable, network or whatever devices – essentially a media aggregator from which you choose your content to be displayed.

        You’ll still have your $190 a month cable/satellite bill but your have a more efficient and, no doubt, elegant method of viewing your content.

        I just don’t think Apple has any intent to design a TV set that is too expensive and will become outdated easily. The Apple TV model is the most efficient mechanism for distributing multiple content chanels.

      2. $190?!!! I gave up cable and satellite a while back. Today’s over the air digital TV signals are either there or not. If it’s there it’s in beautiful HD. The days of ghosts and snow and crappy visual quality due to weak signals are long gone. I have an inexpensive antenna (<$100), Netflix, and iTunes. That covers my viewing needs for about $10 per month.

        If Apple needs content they can easily buy Disney for cash. That would give them everything in the Disney/Touchstone/Buena Vista library, plus ABC and ESPN. They could make a deal with the NFL, MLB, MLS, NASCAR, and/or the PGA. Imagine being able to subscribe to all your favorite NFL team's games or a whole season of NASCAR. That's how Apple can kill the cable/satellite providers. If they need dumb pipes for delivery then buy Sprint or Century Link. That would give them a cell company as well. What would happen if they then took the iPhone away from all the other cell companies? This is going to be fun to watch.

  2. Yeah, and the music industry would have never gone for an iTunes digital store / mp3 player combo and that whole cell phone idea didn’t work out so well did it! Puuulease… Wonder if MDN iCal’ed? While the TV industry regarding programming and bundles, etc. may be a stumbling block, if done correctly, Apple can crack TV business by virtue of people wanting it? Why? Because currently they have no other choice and don’t know any better? Give them a choice of something new, PROPERLY done, great selectable content at a good price at it could work. I for one am not tied via loyalty to my cable provider whose rates have gone up for crap programming that I am stuck with.

    Wonder if this sentiment of ‘not cracking TV business’ will be as prophetic as ‘former’ Palm’s ‘former’ CEO regarding the iPhone announcement? What’s that CEO doing these days??? Or Ballmer laughing at the iPhone because it doesn’t have a plastic keyboard?! VISIONARIES, pffft…

    1. +1 Agree. It will be part hardware, part integration, and services offered (need agreements for that part). But so much is just sitting there, ready to be put together.

      Imagine sitting in front of your new SOMO (or some brand name tv) TV “with Apple inside”.. It has inputs for digital over the air antenna, cable, dvd, etc, and internet (or wireless if you have wifi.).
      You use your apple iPod touch or iPhone as your remote and you can access what ever you want. Regular cable, ESPN package, DVD, or internet NETFLIX, ESPN specials, etc.

      The key is that by integrating apple tv internally (or option to use existing apple tv and your tv) and a new programming interface, you can get what ever you want.. Want cheap? get over the air digital, NETFLIX, and internet specials. Want all ESPN, get it on cable, The key is not forcing everyone to do it your way, but rather making your (apple way) way be so good everyone will flock to it.

      Already, Apple tv has rental specials, a number of services allow buying over the internet specials, NETFLIX give good older movies for cheap, so see, everything is already there, it just needs Steve’s magic mixing touch.

      Just a thought, en

  3. just like Apple “struggled” to crack the phone market? And the tablet market? And having a successful retail operation? And the MP3 player market that everyone said they were too late to make an impression?
    Seriously, where do these doofuses keep coming from?
    I have no problem with an intelligent look at the challenges that Apple may face in a given market sector, but to keep coming out with fait accompli stories of Apple’s failure before a product is even released is like betting against something travelling down towards the floor when you let go of it.

  4. There are two options: an Apple Television, and/or an Apple TV and a separate screen like we already have. The only things an Apple Television could do better are the physical design, the panel display quality, and remote control. The display quality is ultimately going to be determined/limited by the content, and with people still having cable/satellite/terrestrial/whatever I don’t see a large portion of the population seeing much of a benefit the majority of the time. Remote wise the only features it would offer over whatever the current Apple TV are access to source inputs, changing the volume and settings that you barely access beyond the initial setup. I don’t see that these would offer enough of an improvement over their current “hobby” to justify people’s expense and their commitment to manufacturing. With more and more content being internet based then the current Apple TV along with an iOS based portable device and Airplay should be able to cover most of the bases.

    Making a Television isn’t the difficult bit, it’s getting the integration of content to justify doing it rather than using an existing solution. Selling a screen just adds expense.

  5. At a Fry’s Electronics over the weekend I saw the Samsung Smart TV. It’s voice and gestural controlled and integrates everything from your music to the web including gaming. It’s impressive. But when Apple enters a market they do so with the right kind of wedge. Not too much, not everything you ever wanted but with those aspects they include extremely well thought out and produced. They come with the name and the enormous footprint it carries. There is likely not “new ground” to be broken here, just as tablets and mp3 players all preceded Apple’s entry. But when they get in they will carry something the others don’t have. What that is we will all hear Tim Cook reveal, most likely in October or January.

  6. I will confess… I can’t imagine a TV product that Apple can come up with that would get me to fork over $1500 for a new set.

    But I would have said the same for the iPod… the iPhone.. and the iPad. And I own them all.

    Whatever they have up their sleeve, I am anxiously awaiting the unveiling. What magic have they conjured up that I cannot even imagine? I am prepared to be disappointed; but I am also saving up my $1500.

  7. Sorry but so many of these Anal—ysts are just so lacking in imagination, its scary.

    I was sitting there one day, trying to figure out what Steve Jobs had come up with and then it hit me…. And the more I thought about it, the more it just totally makes sense. And while it is totally disruptive, it does not try to do dumb things like try to take over an over saturated mature market by doing the same things that everyone else is doing.

    Just like Steve Jobs succeeded with iTunes and music, I think his idea will work with tv. It changes things by coming in the back door and just making things better.

    I will say that I do not see Apple selling a tv.. I do see them working with several tv makers and having the sets be branded with “XXX” tv with Apple TV ( or new logo) inside.

    Just a thought.

    1. BLN, we heard the same thing about the iPod, iPhone, and iPad. You just substituted “TV set” into the old FUD.

      The iPod, iPhone, and iPad have proven to be wildly successful despite of initial analyst/pundit overestimation of the product sales price and underestimation of their consumer appeal and the power of the Apple ecosystem (which, to be fair, did not exist when the original iPod was released). So you are just replaying an old and flawed message. The ‘new Apple’ (since 1997) has done pretty well as avoiding releasing majorly flawed products.

      I still do not expect Apple to release an actual TV, just the value-added hardware and software that provides the UI and content access. However, if Apple *does* release an integrated TV solution, I am confident that it will perform well and attract a reasonable number of customers, not just the “few hardcore fanboys.”

  8. Too many people are over-imaging what Apple will deliver. The Apple TV will be a giant iPad. Whatever you can do on an iPad (watch your iTunes content, play games, surf the net, watch free to air & catch up tv, video calling, watch subscription tv like MLB) you will be able to do on ATV. They’re not going to “revolutionise” the cable industry because they know they can’t.

    1. They’re not going to “revolutionise” the cable industry because they know they can’t.

      Possibly the dumbest comment on here so far. If history has shown us one thing, it’s that Apple only enters a market when they think they can do something revolutionary. If, as you suggest, Apple “knows” it can’t revolutionise the cable industry then it wouldn’t even be looking at it.

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