Apple Inc. (Nasdaq: AAPL), the world’s most valuable company, is in talks with at least one of the largest U.S. cable companies about building a set-top box that would carry live television and other content, a person with knowledge of the discussions said.
Consumers would be able to purchase the device instead of paying a monthly leasing fee to cable companies, said the person, who requested anonymity because the talks are private.
A deal would mark the iPhone maker’s biggest foray into TV after years of calling it a “hobby.”
The company’s $99 Apple TV product doesn’t carry live broadcasting and can only be used for downloading movies and TV shows from the iTunes media store or for streaming content from such services as Netflix Inc. and Google Inc.’s YouTube.
By partnering with cable companies, Apple would get access to myriad channels now available to subscribers, instead of having to strike independent licensing deals with media companies and program owners after shows have aired.
Tom Neumayr, a spokesman for Cupertino, California-based Apple, declined to comment. The discussions were previously reported by the Wall Street Journal.
Apple executives have long negotiated with media companies about ways to get more content for a TV product. Walt Disney Co.’s ESPN sports network has talked with Apple about giving subscribers online access to programming through Apple TV, executives said in May.
One challenge Apple has faced is that cable companies such as Comcast Corp. have invested heavily in developing a new user- interface for their own set-top boxes that they lease to customers for a monthly fee.
Before his death last year, Apple co-founder Steve Jobs told biographer Walter Isaacson that he had “finally cracked” how to build a TV device.
“It will have the simplest user interface you could imagine,” Jobs told Isaacson in the biography “Steve Jobs.”
The comments fueled speculation about Apple’s aspirations to reach customers in the living room. Gene Munster, an analyst for Piper
Jaffray Cos., has said that the company has built a prototype TV for release by next year.
Besides Eddy Cue, Apple’s senior vice president in charge of media partnerships, another executive leading Apple’s TV effort is Jeff Robbin, who helped create the iPod and build the iTunes store, people familiar with the project said last year.