Apple TV, yes. CableCARD? No way.

Apple TV, yes. CableCARD? No way.

Summary: A former Apple executive, now a Silicon Valley VC, is the latest to argue that an Apple-branded TV is inevitable. But his argument assumes that an Apple TV would deliver cable subscriptions to your living room using the finicky CableCARD technology. That won't happen. Here's why.

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Jean-Louis Gassée (who worked at Apple back in the 1980s and is now a Silicon Valley venture capitalist) has a fresh blog post arguing that Apple will develop its own TV:

The idea is exciting and so obvious it’s got to happen. Imagine a true plug-and-play experience. One set with only two wires: power and the cable TV coax. Turn it on, assert your Apple ID credentials and you’re in business. The program guide looks good and is easy to navigate; pay channels are just a click and a password away. The TV runs apps, from games to FaceTime and Skype, it “just works’’ with your other iDevices and also acts as a Wi-Fi base station using the cable provider’s Internet service.

Sounds great, doesn't it? Until you see that Gassée is depending on CableCARD technology to do the heavy lifting:

An integrated Apple TV set wouldn’t benefit from better electronics as naturally as an iPhone does…unless, of course, the tiny iOS computer is implemented as an easily accessible plug-in module. This could also solve — or at least mitigate — the field service problem: Bring the module to the store, we’ll diagnose and replace it if needed…or sell you this year’s model.

In one device we might have something like: a CableCard inside an Apple TV 3.0, itself inside a TV set.

That’s a nonstarter right there.

CableCARD is finicky. It violates the most fundamental of all Apple principles, which is that the underlying product has to “just work.” No one who has ever tried to pair a CableCARD to a consumer device would use that phrase.

It also means that Apple would be dependent on cable companies—many of them—for critical technical support issues. That would drag Apple's legendary support experience into the gutter. On the American Customer Satisfaction Index ratings, with its 0-100 scale, Apple earns an enviably high 86, far above the average score of 78 for personal computer manufacturers. The subscription TV industry as a whole earns a dismal 66, with cable giants Comcast and Time-Warner Cable down at 59.

Update: As a commenter points out, CableCARD is a U.S.-only technology. There are dramatically different TV-delivery technologies in Europe, in Japan, and in South America. That complicates the issue considerably.

Back in 2008, Steve Jobs dissed Blu-ray technology, calling it “a bag of hurt.” CableCARD makes Blu-ray look simple by comparison. It’s loaded with proprietary digital rights management technology that Apple would have to license from CableLabs, and it’s subject to program licensing restrictions that can be horribly confusing for customers

I wouldn’t be surprised to see an Apple TV someday, maybe as early as next year. But I would be shocked to see it as a delivery vehicle for cable subscriptions. Apple’s future is in streaming media from its shiny new data centers like the one that opened early this summer in North Carolina.

The company controls the iTunes ecosystem from start to end. Imagine an Apple-branded TV set with a direct (wired or wireless) Internet connection, with an iOS device (an iPad or an iPhone Touch) acting as remote control. It could serve up TV shows and movies from the cloud, with Apple in complete control of the technical and financial details of each transaction.

The device that Gassée describes is nothing more than an Apple-branded set-top box embedded in a TV set. That’s a combination of two low-margin businesses. Google might want to play that game with its Motorola Mobility acquisition, but Apple’s all about disruption. And an iTunes TV would seriously disrupt the traditional cable business.

Topics: Telcos, Apple, Hardware, Mobility, Networking

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21 comments
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  • Not feeling it...

    The go to market problem that Steve talked about at D still stands. Apple does not have instant content. A MLB app and NHL alone are not going to do it. I can't cut the cord until all the instant demand stuff is there... i.e. sports.
    As well, why would a company with the greatest margins in the device industry enter the lowest margin market available. Where is the payoff? I don't see Apple winning the living room on the priciest TV available. TV's are a 5 -7 year investment for most people. Not the turnover rate of phones, tabs, laptops and MP3 players.
    chilove
    • What margins are you looking at?

      @chilove

      Margins on TVs are great, especially if you're already using the same tech and supplier channels for displays. Everyone seems to keep forgetting that Apple doesn't make anything. Apple's problem would be differentiating their products from Samsung, from whom they get most of their displays. The only way for Apple to do that would be in the software. STBs are low margin because carriers have every incentive to control the content, and personal STBs undermine that. So, if Apple is to make a TV at all, Ed's vision is the most likely. Alternatively, maybe Apple buys TimeWarner. That could be interesting.
      tkejlboom
  • RE: Apple TV, yes. CableCARD? No way.

    "with an iOS device (an iPad or an iPhone Touch) acting as remote control. It could serve up TV shows and movies from the cloud, with Apple in complete control of the technical and financial details of each transaction."<br><br>that sounds alot like What Sony is aiming to do with their tablets and their new "Sony Entertainment Network (Qriocity)<br><br>I still dont believe that an apple Tv is on the way. People dont buy televisions very often or as often as they buy tablets and computers and I dont think people would like seeing an Apple logo on their television hanging on the wall lol. But thats just my opinion<br><br>Tech Guy Chris
    TechGuyChris
    • Don't buy TVs that often but..

      @TechGuyChris ..are constantly paying for content.. thats even what the current appleTV is about.. selling iTunes content..
      doctorSpoc
    • RE: Apple TV, yes. CableCARD? No way.

      @TechGuyChris I know people that buy MacBooks and iDevices just to have that Apple logo.
      Champ_Kind
  • RE: Apple TV, yes. CableCARD? No way.

    I'll take my TV use in Australia as one example.

    52" HD LCD in loungeroom with 4 HD inputs

    Foxtel Cable
    This provides broadcast digital channels, cable channels, HD PVR, streamed movies, background downloaded HD movies and also movies provide over an internet link (from Foxtel)

    Win 7 PC
    Web pages, downloadable TV and movies, streamed TV and torrents.

    Blu-Ray DVD
    Hardly use this at all and it's now been a while since I saw the inside of a vdeo library.

    Xbox/Kinect
    Games

    I also have wireless repeaters for the Foxtel so I can view it in other rooms. There's also monitors and PCs in other rooms for Internet use. I could also connect the Xbox to the Net, but haven't really had a need yet.

    So what could Apple provide? Really they could only replace my cable company and I can't see them supplanting Foxtel in Australia. As to requiring a cablecard, I already have a PC and while I could use it with Media Center etc, my current cable delivery is better.

    Now I know I may not be typical, but I just can't see where Apple can offer anything better than current options.
    tonymcs1
    • RE: Apple TV, yes. CableCARD? No way.

      @tonymcs@...

      Foxtel is probably offering a better STB than Comcast. Still, what happens if you move or change services? Do you lose all your recorded content? What is your storage capacity? I know for sure you're not going to get a "wireless repeater" for a STB in my market. I don't care what company gets me better television service than Comcast, but if someone can figure out how to do it, I'm switching.
      tkejlboom
  • RE: Apple TV, yes. CableCARD? No way.

    I can't see it happening as CableCARD is a US-only venture as far as I know. It would be useless outside its domestic market. Pretty much every current Apple product can be sold worldwide.
    nrturner
    • RE: Apple TV, yes. CableCARD? No way.

      @nrturner

      38% of Apple's revenue is still in the U.S. alone, but more importantly, if they used hot swappable modules, they could use cablecard in the U.S. and something else overseas.
      tkejlboom
  • RE: Apple TV, yes. CableCARD? No way.

    As much as I like Apple products, paying their kind of premium for TV isn't gonna work for me. I generally buy a TV with the premise that if it breaks, and is out of warranty, I will throw it out and buy a new one. Different manufacturer each time, too. Sooner or later, I'll get one that lasts. Or not.
    thetwonkey
  • RE: Apple TV, yes. CableCARD? No way.

    In my area Time Warner already is streaming my content to there boxes. They have been doing so for years..channels 100-1762 are all streamed "on demand" to my boxes over IP. You can get very good deals from them you just have to call once in awhile. Right now if they stick with it I have house DVR 3 boxes (1 DVR with a 500gb HDD that streams it's content to other boxes),digital phone and 20mbps+ down 1mbps up internet for just under $116 a month for the next 2 years..so why exactly do I need anything from Apple?..sure it would be nice if they gave me more control over the content and boxes but at that price I'm happy...
    ChrispyCritter
  • RE: Apple TV, yes. CableCARD? No way.

    I completely agree. Cablecard is fundamentally incompatible with Apple's standards for simplicity. But Apple/Google/Sony/Tivo are hopefully each (and especially working in concert) large enough to affect some change, carry some leverage with the FCC (which has also recognized that Cablecard only meets some of the goals originally intended, certainly not the 'simplicity' one). I think if Apple or Google decides to enter the DVR market, it will be with whatever succeeds Cablecard (which may come to fruition precisely because they decide to enter the market):

    http://www.engadget.com/2009/12/23/tivo-sony-and-others-tell-the-fcc-gateways-should-replace-cab/

    http://hd.engadget.com/2010/03/17/a-cablecard-replacement-is-due-by-december-2012-bandaids-by-thi/
    spec07
  • RE: Apple TV, yes. CableCARD? No way.

    As you mentioned in your last paragraph, Google has bought the division of Motorola that makes a large portion of the cable company STBs. That makes Google now one of the biggest companies making what are effectively embedded-cablecard devices (the FCC requires that cable company STBs must use the same mechanisms as Cablecard; If only they had gone a step further and required actual Cablecards, we probably wouldn't be in the same SDV mess).

    Who knows ... this Motorola purchase by Google may prove to be a major development toward a Cablecard replacement. If they were interested in making a generic 'gateway' (which would hopefully be a standard allowing interoperability with any DVR, any provider), this purchase would give them a big starting point. I wish more consumer electronic heavyweights (beyond Sony and Tivo) would get interested in this. The more players, the more like it won't be something proprietary (not to doubt that Google or Apple would have completely utopinion intentions of everything working with everything else).
    spec07
  • Cablecard vs. phone activation

    Overall I agree: TV is only getting more complicated. What we all want is a simple system that just works. Cablecard is just a device to enforce cable service is not stolen. But that could be acomplished other ways if we had more trusted hardware.<br><br>On the other hand, I have Ceton InfiniTV in my HTPC and it was super easy to setup. In fact, the cablecard+TV tuner from Ceton are only components that given no trouble at all.<br><br>Of course, my cablecard experience was smooth because Comcast decided to not obstruct me: they handed off the cablecard to me from their local office with no questions asked and activation was juts one call. If Comcast wanted they could make activation even easier: by using their web site or even some software that you download on your HTPC (or cablecard-enabled TV) to do that. They would just need to ask for username and password.<br><br>Think about this: if you buy the glorious iPhone at Apple store, you don't have yet a funcitonal phone. You still have to activate the phone with AT&T or Verizon. That's not exactly Plug&Play, is it? And if you don't have service yet with the carrier you be prepared to either go the their store (where you could get a iPhone BTW) or do it online and be faced with their maze of options.<br><br>
    movedor
    • RE: Apple TV, yes. CableCARD? No way.

      @movedor

      I have a Ceton InfiniTV as well. I had problems, but not due to the hardware. It turns out that the cables coming in from the street were so old and obsolete that they could not handle the bandwidth of 4 HD channels plus internet at the same time. And Comcast wasn't so willing to come and replace them, so I wound up buying a cable amplifier to solve the problem, along with rearranging my WiFi setup so the router was in a different room, which meant I needed a bridge to get my whole house a good link. If others who are less technically inclined had to do that, I am sure they would have given up.
      Michael Kelly
  • Cablecard sucks

    NO ONE supports it who is in the TV tuner for computer arena. Not Hauppauge (who are my No.1 choice), not anyone reputable.

    Cablecard needs to die and a S O F T W A R E solution needs to be used by the cable companies. NOT a hardware solution.

    Until that time, I will download all my shows online in at least 720p and not have ONE pang of conscience.
    Lerianis10
  • Message has been deleted.

    Monkeypox
  • RE: Apple TV, yes. CableCARD? No way.

    I had a duel channel cable card in my HD Tivo. The card never gave me a problem, in fact I never thought about what it was doing, it was there, and worked. The real problem with HD DVR's is the simple fact that the hard drives that are used in the system, take a 24/7 beating. The eventually fail, and when I say eventually, I mean like clockwork, each and every year. I soon got tired of my HD Tivo failing, and being charged to swap it out for one that worked. All the time, my original Tivo from umpteen years ago, Tivo 1, and my slightly newer Tivo 2's, were still working fine. Not one of the older Tivo's every failed, yet the HD Tivo's fail like they are on a time clock, and always out of the warranty period. They could have just told me to pay $150 a year to keep the Tivo running, but that would be on top of the monthly fee's I was already paying. I now have DirecTV DVR's, and for a modest $7 per month, they will fix any of the six receivers I have, including 2 HD DVR models. I have Apple TV, and while I like it a lot, it's best feature is streaming HBO-Go ,and Max-go from my Ipad to my big screen through the Apple TV device. All the rest that it does is redundant of all the other devices I have, including the Bluray player, and the TV itself. They would not put a cable card in Apple Tv unless they could collect a fee from it. I always look at the fee's associated with my entertainment systems, and take the most bang for the buck. Right now that is DirecTv, with the top programming package.
    massimj
  • ED: I came to exactly the same conclusion

    I read that article yesterday, and when I got to the CableCARD part, I came to the exact same conclusion that the article was flat-out wrong.<br><br>I absolutely love the IDEA of the CableCARD, but in actual use it is incredibly annoying and difficult to work with. The worst part is the mandatory series of calls to one's cable company for the "pairing" of the card to the device -- always a nightmare. I say "series" of calls, because in my various device experiments, it only worked one time with a single phone call.<br><br>From a content perspective, the big downside of CableCARDs is the absence of "on demand" content, but I guess that's where device manufacturers can come up with Internet replacement content and technology.<br><br>Finally, from a device perspective, I can actually recommend one product -- after all my attempts -- that lives up to its billing, and is actually worth buying. It is the HD Homerun Prime. It just started shipping, and since I was on the pre-order list, I now have one.<br><br>You plug in: (1) the CableCARD, (2) your cable TV wire, and, (3) your CAT-5 network cable. Then you have the ability to access the 3 built-in tuners from any computer on your network, as if the tuner is directly connected to the computer. (A 6-tuner version is also available.)<br><br>To demonstrate how cool this is, I have a Fujitsu tablet computer running Windows 7, and I have full Media Center live TV support through wireless. Yes, I know that I can accomplish similar things with an iPad (and I have done it with my iPad), but it is a good demonstration at the HD Homerun's cabailities over a network.<br><br>Mind you, once again, we are dealing with a CableCARD, so it's not plug and play. Apart from getting the HD Homerun Prime working with the mandatory phone call to the cable company, on the computer(s) you want to "attach" the tuners to you also have to (1) install the HD Homerun driver, (2) run the Media Center Digital Adviser "Extra" package to test your hardware and "certify" it's capable of digital TV, (3) activate digital TV in Media Center, and, (4) do the customary TV Tuner Setup in Media Center to attach the tuners and get it all working.<br><br>Apple might be able to skip a couple steps because they don't have any diversity in hardware (and thus everything can be pre-certified as "capable"), but as you can see, it's still a finicky process, and every step represents an additional point of failure.
    Speednet
  • Maybe you missed the point Ed...

    If you take Jean-Louis Gass?e's words *literally*, you're right: creating an embedded Apple TV + CableCARD frankenstein would be like trying to create a Cosmopolitan-Margarita combining vodka and tequila in a glass.

    Quite the opposite is JLG idea, my friend Ed, what he's suggesting is a masterpiece, which in hindsight, might be even bigger than the iPhone.

    Let's imagine this new beast is released January 9, 2013, exactly 6 years after the iPhone. It's called the "the iCable" (forget the name, as a better one could come along). It's the same size and thickness of 3.5" floppy disk and even fits on a similar slot. On the outer rim (the one facing outside) there's a mini port similar to mini usb, but rather a new standard. Let's call that NuCoax or Universal Coax Bus. It's really a connector for four pins, akin to iLink. It connects to the cable company using a different connector, so as to differentiate it from CableCARD.

    Bear with me, things get more interesting as they move on. On the inside rim, the one facing the television guts, there's a PCI-e type slot. In reality it's an internal Intel Thunderbolt, which Apple now masters after three years manufacturing the Mac Mini and MacBook AIR. But this baby has an A6T processor, quad core with TB support and 1Gb RAM and no SSD. No more dock port, no more HDMI quality. This baby can pump Apple Cinema quality images. And embedded thunderbolt allows us to place the Graphic card *outside* the card, to avoid thermal problems and improve resolution and since our little A6R won't have a built-in graphic processor, the TV set creator can choose either NVIDIA or AMD and even offer sets with even greater resolutions. Plus they can also bundle a Thunderbolt port, alongside the original HDMI and RCA.

    Before release, Apple negotiates with just one TV manufacturer and just one Cable system. Now, the system does not use anything not available today. Data for the system is a normal "cable broadband internet", just like the iPhone was a standard GSM phone. Video is digital and is processed as desired by some built in apps.

    Do I hear a line on the Apple's stores to buy the new sets with the card? Yep... trust me... this can be the next big thing.
    cosuna