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Customized programming is said to be one of Apple's most desired features for its rumored television set, according to analyst Shaw Wu with Sterne Agee. In Apple's vision, customers would choose whichever channels or shows they want for a monthly subscription fee.
"This is obviously much more complicated (than current offerings) from a licensing standpoint," Wu wrote in a note to investors on Wednesday. "And in our view, would change the game for television and give AAPL a big leg-up against the competition."
Hardware and technology are not the issues holding back Apple from releasing a television set, he said. Instead, Apple must negotiate unique content deals that will allow the company to differentiate its product from other televisions on the market.
"Today, iTunes has a rich library of movies and TV shows but it is mostly for downloads and only movies are available for rentals (TV shows once were but were terminated in August 2011)," he wrote. "What's missing is live broadcast television."
He said the obvious way Apple could allow this is to integrate with a cable or satellite subscription already offered to customers. But the more revolutionary way would be to deliver live content via the Internet or IPTV, a method that would be more in line with the company's existing iTunes and iCloud services.
Apple's interest in expanding its content offerings has been known for some time, as the company is said to have pushed for more options and greater flexibility in negotiations with content providers. In November, CBS Chief Executive Les Moonves revealed his company was approached by Apple about a potential streaming TV deal that would share ad revenues, but the network declined Apple's offer because it prefers licensing its content.
Wu previously noted in October that Apple's plans to build an HDTV have been held up by content providers who are reluctant to allow Apple to offer subscription-based plans to customers. Rumors of an Apple-built HDTV began to pick up steam earlier this year, when it was revealed that Apple co-founder Steve Jobs told his biographer that he had "cracked' the secret to building an integrated, easy-to-use television set. He said the device "will have the simplest user interface you could imagine."
If Apple does release a full television set, Wu believes it would be wise for the company to continue selling its existing Apple TV set top box. This would allow Apple to continue offering existing HDTV owners the benefits of Apple TV, while an integrated TV set could offer a complete easy-to-use solution like a Mac, iPad or iPhone.
Rumors have pointed toward a 2012 launch of an Apple television with Siri voice control technology built in, and the company is said to have already built prototypes of the anticipated device. The latest rumor this week suggested suppliers will begin preparing materials for an Apple-branded television in the first quarter of 2012, with the device debuting in the second or third quarter of the year.