Editorial

Editorial - An Apple Venture into DVRs Would be Ill-Advised

Several sites on Thursday mentioned that Apple has filed a patent on a system that involves a DVR and a remote control device. While Apple can be expected to do its homework on conflicting patents, there are several reasons why adding to DVR to the Apple TV, even with an SSD, would be a bad idea.

If there are people more protective of DVR technology than those who hold IP and patents on DVRs, they are rare. Recently, EchoStar felt the full wrath of TiVo who stated that EchoStar has failed to comply with hefty court award after TiVo claimed their patents were violated. According to TVPredictions on Tuesday, EchoStar now owes TiVo close to US$100M. News of the appeals court verdict sent TiVo stock soaring when it was announced in January.

There are many questions associated an Apple DVR. The Apple TV was roundly criticized when it was first introduced for not having a DVR feature. Apple is a high technology company that certainly could have included this feature if it thought it could deal with existing patents and if such a feature could be an important part of Apple's business model. Apple did not.

Next, while TiVo remains a rather small company and depends on agreements with cable and satellite companies to keep it afloat, those very same companies have swooped in and built their own DVRs. Penetration in the U.S. with any kind of DVR is fairly high. Traditional carriers perceive the DVR as an important tool to both satisfy their customers, with that 30-sec skip button, as well as the offsetting ability to provide paid services such as VOD. The gateway to that coaxial cable is controlled very well by carriers despite anemic federal laws.

Given that CableCards have been successfully suppressed by the carriers and that not many Apple customers will be able to see the benefit of two DVRs, battling for interfacing and operational use, I don't see the benefit to Apple.

It could be that Steve Jobs sees the ancient TiVo + HDTV metaphor and software as a ripe business model for Apple exploitation, much as Apple disrupted the mobile phone ecosystem. So Apple filed the patent expecting that, someday, they might decide to jump in and disrupt that market as well. Especially if something changes radically in the technology to their benefit. Apple could buy TiVo, but the idea has been dismissed because Apple doesn't buy companies that are losing money. However, the patent portfolio combined with new, disruptive technologies could be worth it in this case.

Right now, the home HDTV big stakes market is held by some heavyweights who hold the keys, and it won't be very easy for Apple to jump in here. Moreover, Apple is a company that seems to attract lawsuits. Jumping into the DVR business at a late stage, risking lawsuits and the wrath of Hollywood and the carriers just doesn't make sense. It would be too much of a distraction.

I think the Apple TV is a good complement to a current home theater that already has the key components supplied by the satellite or cable carrier. If Apple wanted to get into the DVR business, it would have a long time ago.

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A guest said: (hide)

Then Apple could just buy TiVo, pocket change to Apple, and be done with it.

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h-dog said:

member since 11 Jul 2005 with 12 posts, unranked, send him a message or view his profile

Heh. This sounds incredibly familiar. It sounds just like what folks said about Apple dealing with the Major music labels, with iTunes and the TV networks, with Apple and cellular carriers. Here's the thing: Apple knows *way* more about any market they're going to enter than you or I do, and they're almost certainly not going to do anything that seems obvious.

Apple of late has decided to make money by eliminating or de-emphasizing what Jobs calls "orifices". Cellular carriers are an example. The major music and movie labels are another. Clearly, cable companies are yet another. Jobs made it clear that the AppleTV was due for attention soon. If Apple is able to deliver a kick-ass product with the cachet of the iPod and iPhone while offering users liberation from the cable companies (which are pretty much universally hated) then I'd say they have a pretty solid chance of beating the crap out of potential competition.

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A guest said: (hide)

I think this could be huge - Look at the mess of cables, boxes and remotes you have at the moment.

Replace ALL that with an HD display and proposed Apple TV plus Apple's minimalist remote. All the connections you need are Digital RF TV from Satellite, Cable or Terrestrial Antenna into a built-in dual tuner-decoder, Internet (Wireless if you wish) and you've got it all. Realtime digital TV (+HD), DVD playback (and record with the right drive) full PVR facility plus whatever you can get down the internet pipe. Heaven!

Tim

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A guest said: (hide)

I've been saying this for years, and I'll continue to say it only differently. Apple should buy TiVo. It can be purchased for roughly 1/20th of Apple's cash on hand. This gives them the patent portfolio if nothing else.

Next, Apple should strike AT&T/iPhone-like deals with Comcast and other major cable providers. Cable cards are nice, Comcast pushing Apple TVs is nicer.

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A guest said: (hide)

Strongly disagree. It's obvious Apple has kept the DVR in its back pocket as a forcing function on the tv networks. If the networks refuse to make their shows available for sale, then Apple will allow recording. In addition, now that Apple has made it clear that TV show sales were not an AppleTV sales driver, and are now trying the movie rental route as the driver, there's nothing to stop them from adding recording now. And Apple would be sure to make certain that their implementation in no way borrows any technology patented by TiVo.

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A guest said: (hide)

When did Apple become afraid of lawsuits? They're a lawsuit magnet.

I think such a move would be very well-advised. Tied together with a great touch remote (or iPhone or iPod touch) that could be operated over the Internet, it would easily become the market leader in mindshare, to be followed soon by market share.

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A guest said: (hide)

Another article assuming that the US is the only market in the world.

Any thoughts about Europe where over the air digital TV and DVR's are much more common.

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jeffjungblut said:

member since 14 Aug 2007 with 6 posts, unranked, send him a message or view his profile

Anonymous wrote:
And Apple would be sure to make certain that their implementation in no way borrows any technology patented by TiVo.

TiVo isn't the only player with patents.

Apple's diagrams show a program guide displayed on a TV screen.

Gemstar's lawyers are getting thirsty.

http://www.gemstartvguide.com/tabid/159/Default.aspx

They're all about IP licensing and lawsuits.

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