Is the End of the Cable Box Near?

by: FP Trading Desk posted on: June 01, 2008 | about stocks: AAPL / SNE    

Sony Corp.’s (SNE) deal with the six largest cable companies in the United States to develop a television that does not need a set-top box should eliminate the hassles and costs associated with renting a cable box. The move also poses a threat to Apple Inc. (AAPL) and others that may be working on products that may no longer be needed.

Using the Tru2way “open” platform that was introduced at the Consumer Electronics Show in January should also improve picture quality since high-definition signals will no longer have to be converted several times on the way to TV screens, notes RBC Capital Markets’ Mark Sue.

Sounds great, doesn’t it? But we’ve heard about the death of the set-top box before, the analyst told clients. His doubts stem from the different pace of technological developments between TVs and residential termination devices, with TVs typically in place several years longer than the three to four-year lifespan of a set-top box. As a result, Mr. Sue doesn’t think advanced boxes are going anywhere in the near future.

Then there are the higher costs associated with buying an LCD TV with Tru2way, which may make sustained consumer adoption difficult. Technological problems associated with digital satellite TV or a particular cable company’s offerings may also prove challenging.

Regardless, the analyst said it is too early to determining the success or failure of Tru2way, only that the death of the set-top box is not imminent. So his unit shipment forecasts for the likes of Cisco Systems Inc. (CSCO) and Motorola Inc.(MOT) are safe for now.

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This article has 7 comments:

  •  
    sbjforever
    Jun 01 11:05 AM
    One day the set-top box will go the way of the Dodo. And the sooner the better. The brain of such devices of course resides in the software. Stuff that chains the viewer to the whims of the cable company, tells the box and the subscriber what to do and what can and cannot be done.

    Apple TV could be attached to the TV set today (retaining clips, power outlet, HDMI panel on the back panel) so as to appear as if part of it. A more mature version of the device could be built right in. You couldn't do that so easily with the relatively humungous set-top box. Trouble is, there is stuff in the box - remote control, satellite set-up, channel authorization, selection, billing, display etc, that is must have stuff too.

    Don't look for Apple to be producing such a union themselves although such strategy must be the subject of keen debate within the company. Rather, they would strike up partnerships with set manufactures and cable-satellite companies - much as Sony is trying to do today. Compelling content will decide the winners.

    One thing is certain, Apple TV must have a screen. And to content hungry viewers, increasingly, their dumb TV needs an Apple.
  •  
    Webster
    Jun 01 12:50 PM
    One thing for sure ... Apple TV was dead and a FLOP starting the day after this piece of sh!t was released. Reasons? Too many to list, but most prevalent - Pixelized picture on any decent sized TV, NO HD, did I say NO HD, Apple crap only content, no recording capabilities outside of Apple CRAP content, AND (fan fare) IT'S THE USUAL APPLE OVER-PRICED!

    Ps, the set top box ain't going anywhere in the foreseeable future because a minority of TV's are on Broadband and too many people need a digital box for old TV's, which in a recession aren't going to be replaced any time soon.
  •  
    Tom B
    Jun 02 10:37 AM
    This is Sony we're talking about. They have made some fine CE devices over the years, but in terms of strategic thinking, they are a non-starter.
  •  
    Grumann
    Jun 02 12:09 PM
    Apple TV may be a clunker as viewed by tech geeks but I'm a user and average viewer and I can tell you the thing works great, is easy to use and, if Apple keeps adding content, could be a winner. Music, photos, YouTube, movies, TV shows, home videos..... it can't record but it does a lot more than other boxes.
  •  
    rweflyn
    Jun 02 12:17 PM
    My Website
    Hey Webster: What planet are you living on? Just because you can't afford one doesn't mean AppleTV is junk. Even Mr. Jobs says it's been a work in progress and since v. 2.0 it DOES display pure HD - like a charm. Between movie rentals, many in HD, our photo slideshows, YouTube on demand, iTunes music and music videos on demand, Flickr, thousands of podcasts, and - oh yeah - all the music from our iTunes library, this little box keeps us entertained for hours upon hours if we let it. This product is still in its infancy and you can be sure Apple has even more planned for it so please, get a grip!
  •  
    crappletv
    Jun 02 06:11 PM
    Hey AntiFUD, what planet are YOU on. Apple TB might have HDMI support but HD it is not. Most people's definition of HD is 1080i or 1080p. At 720p the AppleTV is best described as "DVD Resolution" but not really HD.

    Is AppleTV a dead product? Let's see if Apple announce a replacement at WWDC this week. If they don't it doesn't seem all that likely that it is worth spending time with.

    I've been an Apple die hard since 1986, but increasingly the company is losing the plot, at least for computers. Dell in a pretty box? Their quality is going down hill.

    For a reliable HD solution that works (and you can leave it in VMC mode) see the Sony Vaio VGX-TP25E/B. Dual Cable Tuners, HD recording from Comcast, DVD, CD, Photos, iTunes, internet tv, youtube, etc etc. Apple have a niche product in this space that doen't really work. Oh and place your hand on top of it. Feel the heat, baby? Anything that runs that hot for that long is likely not not last for the length of time most people expect consumer electronics to last, though Apple have set new standards with their disposable iPod's (battery dead? buy a new one). Yeah, very green.
  •  
    Brewer
    Jun 03 12:13 PM
    @ crappleTV and Webster

    The nurse is at the door with your meds. She'll wait while you take them and tell you a nice story about MSFT going up to $35 (and will not even mention their inevitable decline to $19 in the coming months.) A nice lullaby for you!
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