From the very first generation of the iPhone and the evolution of iTunes that came along with it, it’s not surprising to see that Apple, in less than a decade, has taken over both the wireless and music industries and become one of the largest companies in the world. Add the iPad and its contribution to the world of tablets into the mix and Apple came to be known as a leader in personal computers. But the Apple TV console, which has been out for some time, hasn’t quite taken off in the way that people expected, and it doesn’t show any signs of taking over the consumer world like Apple’s other products.
Apple is now in talks with cable companies to create an alliance with them, but one that would be an advantage to only Apple. Essentially, Apple TV, the console, the software, and the content that’s provided through the network would be under the control of the software and hardware giant. The cable companies would only be responsible for providing the service itself, as well as repairing any devices that happen to be malfunctioning. This “dumb pipe” tactic has been used with the other services that Apple provides with its iPhones and iTunes services.
When the music industry initially signed up for the agreement with iTunes, they didn’t realize just how big of a hit they would take. Initially, the music industry thought that iTunes would be the perfect outlet for fighting piracy and sluggish CD sales that were drowning the industry financially. However, iTunes has been anything but successful for the music industry, with several labels taking major hits on their revenues by sharing a piece of the pie with Apple.
Cable companies are out to avoid such a fate that the music industry saw. Similar to iTunes, Apple would like to see about a 30% cut of whatever the cable companies sell over the Apple TV unit. This has major cable companies worried that their revenues would see the exact same hit that the music industry took. While cable companies are fighting to provide a better user experience to viewers, which the Apple TV unit could easily do, it does not want to win the fight at the risk of losing more revenue than what it is fighting for now. While Apple could more than likely come up with a device and provide the service itself, that simply isn’t what Apple does. As soon as it finds a provider for the service, the tide could easily turn.