According to Craig Moffett, an analyst with Sanford C. Bernstein & Co., it’s not as easy as people think it may be for Apple to just come out with a TV set. In a recent feature on Bloomberg Businessweek, several voices echo the same beliefs – the cable operators are simply afraid to hand the reins to Apple.
Answering questions about a potential TV set from Apple, Moffett said, “It’s not a nice, simple, easy story that Apple is going to come in and turn the world upside-down and we’re all going to live happily ever after.”
Moffett is said to have been studying the cable industry for two decades now. He should know. The report also quotes him as saying that “any notion that Apple could soon unveil its TV system ‘ignores the business realities that make this such a complicated industry.’”
The main disagreement with the cable companies has been “a tussle for control over the software that determines the screen interface,” according to people who are familiar with these discussions.
Interestingly, Apple has been designing this full-fledged TV experience since the middle of the last decade, according to the report
“…Apple’s engineers have been working on a more advanced product to allow viewers to quickly find shows and movies, blending both live and recorded material, the people said. It would recommend content based on interests and work seamlessly with Apple’s family of other devices.”
Bloomberg quotes Apple CEO Tim Cook who said in July, “We continue to pull the string to see where it takes us, and we are not ones to keep around projects that we don’t believe in and so there are a lot of people here that are believers in Apple TV.”
Finally, it quotes Walter Price, an investor with RCM Capital Management (NLY) in San Francisco who met with Apple’s management to discuss a new foray into the television industry.
Price, whose company owns $1.9 billion worth of Apple shares, said “It’s a tough problem because the cable companies and media companies are not very enthusiastic about the prospect of Apple creating a better user interface.”
In short – they’re afraid.
The report also says that cable operators are concerned about losing their tight grip on customers paying a monthly subscription which generates an undisrupted flow of revenue.
A good example of how things can change was offered by Rich Greenfield, an analyst at BTIG LLC in New York, who pointed out to Apple overhauling the relationship between wireless carriers and their customers after the 2007 iPhone launch.