Apple’s rumored iTV: Analyst outlines three content scenarios

Piper Jaffray analyst Gene Munster has reaffirmed suspicions that Apple is on track to launch a company-branded television set by late 2012. His latest comments came in a note he sent to clients Tuesday.

While Munster has predicted the debut of an Apple iTV product for years, his claims have only recently started gaining credibility thanks to comments that appeared in the official Steve Jobs biography by Walter Isaacson. In the book, Jobs claimed he “cracked” the code for an integrated Apple television, saying “It will have the simplest user interface you could imagine.”

Munster’s note indicates that Apple is in discussions with a “major TV component supplier” about display components. VentureBeat previously reported rumors that Apple was in contact with Samsung to produce the chip set for the branded-television set, while Sharp will produce the screen.

The note, which was obtained by Forbes, also indicates that Apple wouldn’t move forward without a content solution of some sort. Munster outlined three possible scenarios for Apple’s content strategy.

The first scenario would be for Apple to create a TiVo-like DVR management system while partnering with cable companies. While there would be plenty of benefits (content discovery, social interaction, iCal integration, etc.), this option isn’t very revolutionary. It would also probably require Apple to pay licensing fees to TiVo, since the functionality is so similar.

Of the second, and probably most likely scenario, Munster writes:

“Apple could offer access to live TV from network channels in combination with other web-based video services. One middle-of-the-road option could be for Apple to deliver live TV from network channels (either over the internet or over the air) to the Apple Television. Apple could then leverage a new App Store for the Apple Television to supplement the basic live TV features with Netflix, Hulu Plus, or any content provider that chooses to build an app for the television. In this instance, Apple would also likely continue to offer its iTunes movie and TV content through the iTunes store to the Apple Television.”

A strategy that continues to push both the Apple TV set-top box as well as a branded television is echoed by Stern Agee analyst Shaw Wu. Like Munster, Wu reported that success would depend heavily on the selection of content available.

The last scenario Munster outlined suggests that Apple could offer monthly live TV content package subscriptions on an a-la-carte basis. Essentially, that means Apple would negotiate each channel of live TV programing with media companies. While this would allow Apple the greatest level of control over the TV viewing experience, Munster said “such an offering would be unlikely given existing licensing arrangements between content providers and service providers as well as the fact that it lies outside of Apple’s core competencies.”

Yet, Apple has been in talks with at least one big media company. In November, CBS’ chief executive let it slip that his company had been in discussions with Apple about a commercial-supported live TV streaming service.

What kind of content offering would make you spend top dollar on a new Apple television set? Let us know in the comments.

[Apple iTV mockup image by Guilherme Schasiepen]