Don't Expect an Apple HDTV Anytime Soon

Fortune reports that Apple may not release the rumored iTV -- or at least the HDTV version -- for quite some time. This is based on a "company update" issued on Friday by Pacific Crest analyst Andy Hargreaves. He attended a meeting on Wednesday with Apple CFO Peter Oppenheimer and Eddy Cue, senior VP for Internet services and software.

According to Hargreaves, the Apple execs supposedly talked about its HDTV efforts and how difficult it has been to acquire rights from content owners and broadcasters. In short, the vision of changing the living room doesn't seem to be on Apple's world domination plans in the immediate future -- at least, not in the form on an HDTV. However, given recent rumors, Apple may still attempt to transform the television sector with a revamped set-top box first. Once everything falls into place, the company may push forward with an actual HDTV.

Regardless, here is the note from Hargreaves which echoes what Apple has said all along: it won't enter the TV sector until the company can secure the necessary rights to fulfill its vision -- a vision that's seemingly scaring content owners, networks and cable operators:

Relative to the television market, Eddy Cue, Apple SVP of Internet Software and Services, reiterated the company's mantra that it will enter markets where it feels it can create great customer experiences and address key problems. The key problems in the television market are the poor quality of the user interface and the forced bundling of pay TV content, in our view. While Apple could almost certainly create a better user interface, Mr. Cue's commentary suggested that this would be an incomplete solution from Apple's perspective unless it could deliver content in a way that is different from the current multichannel pay TV model.

Unfortunately for Apple and for consumers, acquiring rights for traditional broadcast and cable network content outside of the current bundled model is virtually impossible because the content is owned by a relatively small group of companies that have little interest in alternative models for their most valuable content. The differences in regional broadcast content and the lack of scale internationally also create significant hurdles that do not seem possible to cross at this point.

The latest report surrounding the rumored iTV project is that Apple wants to offer a DVR service that stores TV shows in the cloud so that users can start any show at any time, or restart a show minutes after it has begun, similar to Time Warner's Start Over feature.

One of the many problems Apple is reportedly facing is that some of the proposed services -- including the web-based DVR -- reside outside the existing rights over TV content cable operators currently have. To make everyone happy, content owners will need to expand the rights of cable operators so that the Apple box can be deployed. But the relationship between Apple, cable operators and content owners still remain tense because the latter parties are worried Apple will control the entertainment sector much like it has with the smartphone and tablet sectors.

That said, Apple's transformation of the living room may be an extremely slow one. The company is currently trying to sell the idea of replacing current set-top boxes provided by cable operators with its iTV device. It would offer an iOS-based interface, Siri integration, and motion sensing to eliminate the remote. Mobile devices -- by way of apps -- would help control channel selection as well, similar to the way current apps from Time Warner Cable and other operators already provide.

The new device is rumored to be making an appearance alongside the iPhone 5, iPad Mini and iPod refreshes, but we're betting this will be a transformed Apple TV set-top box for now.

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