Apple television gamble the talk of CES
— -- Apple is the only company that consistently gets big buzz out of the International Consumer Electronics Show in Las Vegas — without even attending.
This year will be no different.
Connected TVs — TVs that connect to and can access content from the Internet — will be a big part of CES this year. And just about everyone in tech expects Apple at some point to launch such a television — an iTV — that easily consumes and shares with other Apple devices content served from the company's media-storing iCloud.
"I do expect Apple to make an attempt," says Apple co-founder Steve Wozniak, "since I expect the living room to remain a center for family entertainment, and that touches on all areas of consumer products that Apple is already making."
Apple declined to comment on its television plans, but the potential iTV is getting lots of chatter from others going into CES, which begins Jan. 10.
An Apple television foray makes sense. People could use any Apple device to buy TV shows, movies, music or games through iTunes and then play their purchases across all Apple's products — including a full-blown television in their living room.
But a major roadblock for Apple along the way has been securing content needed to make an iTV succeed. The problems Apple is having securing content deals were described in an interview with a person who worked in the Apple TV group and verified by two television industry sources. All declined to be identified because of the confidential nature of the talks.
They say Apple has been unable to cut deals that would let it offer first-tier TV network programs for an à la carte iTunes TV service. That's seen as a key element to launching a revolutionary iTV.
Since there also is no evidence Apple has ordered production of panels for TVs, an iTV is at least a year away, according to analyst Paul Gagnon at DisplaySearch, a firm that tracks the television supply chain.
But that hasn't stopped talk of iTV, nor has it slowed the touting of rival Internet TV plans. Top TV makers such as Samsung, LG and Sony also are looking to shake up the living room, as are tech giants Google and Microsoft.
At stake is a growing world market for Internet-linked TVs that's forecast to nearly double from $68 billion in 2011 to $122 billion in 2016, according to industry tracker IMS Research.
TV makers, in particular, are wary of Apple for good reason: Apple could bite off a hefty chunk of the market. Barclays Capital analyst Ben Reitzes estimates an Apple entry into TV in 2013 could bag it $19 billion in sales.
"Those TV companies could face a dilemma not unlike what Apple's iPhone did to mobile phone makers RIM, Motorola and Nokia," says IMS Research analyst Veronica Thayer.
While Apple has movie deals and some TV shows for its Apple TV set-top box, the key piece for an iTV is securing popular cable network content from the likes of Comcast's NBCUniversal, News Corp.'s Fox, Disney and others, according to the source who worked at Apple.
For now, those networks seem perfectly happy with steady income from millions of cable TV subscribers paying high monthly fees. Internet-connected TVs threaten to disrupt these businesses.
The networks may, however, be more willing to forge deals with technology companies in the future. Cable providers will "lose control in the next five years as more and more content moves online and onto streaming," says Creative Strategies analyst Tim Bajarin.
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