Here's the case for how Apple could blow up the cable industry


Apple is the company best positioned to take on cable giants like Comcast and Time Warner Cable.


That's one of the key takeaways from a new report on the future of TV, from the investment banking firm Pacific Crest Securities.

Apple is reportedly working on a streaming TV service delivered online. The Wall Street Journal reported a few months ago that the service may launch this fall, but Re/Code's Peter Kafka and Dawn Chmielewski reported last week that the service could be delayed as Apple tries to negotiate programming deals with local broadcast networks.

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Les Moonves, the CEO of CBS, said at Re/code's Code conference this week that he recently met with Eddy Cue, Apple's head of software and services, to talk about a TV service.

One of Apple's strengths is taking complicated products and technologies and creating simple, great user experiences. The iPhone wasn't by any means the first "smartphone," but Apple made it consumer-friendly, and put it in the hands of millions of people. The same can be said for the personal computer, as well as the modern tablet.


In a note earlier this month, Pacific Crest Securities analysts argued that when it comes to a TV service, Apple will win where it's won before - on experience, not on price. The firm estimates the monthly cost for Apple's service will start at between $40 and $50 per month, which, when added with a broadband internet subscription, could be just as much as it costs to get TV from your cable company.

apple tv service cost with cable and comcast

Pacific Crest Securities

But that doesn't really matter, Andy Hargreaves, a research analyst at Pacific Crest Securities, told Business Insider.

People hate their cable companies. The customer service is awful, the contracts lock you in, the equipment that you have to rent is expensive, and the number of buttons you have to press on the remote to actually watch something you want to watch is ridiculous. And if your TV provider offers viewing on a smartphone or tablet app, it's likely you can't watch everything you could watch if you were at home, watching on your TV.

"If you can build your service sans all those elements," Hargreaves told us, referring to common cable-company complaints, "I think there's a lot of people who are willing to pay just as much for pay TV as they currently do."

If Apple ends up launching a TV service, it would come amidst a huge shift in the way that people are watching TV. Pay TV providers are losing subscribers, because an increasing number of people are choosing to subscribe to streaming services like Netflix and Hulu instead of paying for cable and satellite.


"Fortunately, Comcast, Time Warner Cable, Dish, and DirecTV are four of the most-hated companies in America," Hargreaves said. "So there's a stated willingness from consumers to change to something better."

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