What Would Apple Do to the TV or Set-Top Box Market?

"The problem with innovation in the TV industry is the go-to-market strategy," Apple CEO Steve Jobs has said. "The TV industry has a subsidized model that gives everyone a set top box for free, So no one wants to buy a box."

"That pretty much undermines innovation in the sector," said Jobs. "The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it."

"I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby," Jobs said. Of course, if Apple were to tackle the TV appliance business, you can be sure they would tear up the existing framework. It isn't clear whether it is the display (the TV) or the set-top which is the bigger problem.

Some of us would say it is the set-top, simply because the "best" TV in a world that requires a decoder is a "dumb" device that does not interfere with any of the features the "set top" might want to provide. The big problem with that approach, though, is that most people get their "TV" service from a company that imposes its own "set top box" on the user.

To really break through, an attacker would have to build a box so elegant and interesting, so capable that it replaces the box the service providers demand. That requires quite a lot of business logic, and quite a few agreements with service providers that might love to be rid of the capital expense a decoder requires, but do want the customer control, marketing and content security advantages the box provides.

But Apple might be the only company, inside or outside of consumer electronics, that could figure that out.

Don't Be So Sure Apple Won't Start Selling TVs