Apple's (AAPL) Big Push Into TV

Apple (NASDAQ:AAPL) needs to follow-up its success in the computer, portable multimedia player, and handset businesses to keep its revenue momentum and relationship with Wall St. Analysts believe the Apple’s next important product will be a tablet PC which will be large enough to compete with e-readers and to play movies that do not work well on smaller screens.

Apple ambitions are moving to the family room. It plans to greatly expand its ambitions for Apple TV, which has yet to be successful.

According to The Wall Street Journal, Apple is preparing to compete with satellite and cable TV which between them have more than 100 million subscribers in the US.  Apple’s internet TV plan is drawing interest from CBS (NYSE:CBS) and Disney (NYSE:DIS). Apple may be willing to pay TV networks and studios more than cable companies do to get access to their programming.

Apple’s first problem is obviously be to get enough subscribers to create a critical mass that will draw content providers. The consumer electronics company has the advantage of the tens of millions of Macs and iPods that are used in people’s homes.

The hurdle that Apple may not be able to clear is that internet TV may have no future at all. Cable companies including Time Warner (NYSE:TWC) and Comcast (NASDAQ:CMCSA) allow customers to use video-on-demand features and to record programs to be watched after they originally aired. Cable companies also offer telephone service and this is allowing TV sets to become more interactive. Sony (NYSE:SNE) and several other TV screen companies will begin to sell 3D sets as early as next year.

Apple cannot get into an industry that does not exist yet.

Douglas A. McIntyre