Apple set-top box to blur line between live, on-demand content

WSJ sources say Apple's vision for the device is to do away with the clunky interface seen on current cable boxes by using iOS icons, while adding a number of new features like streaming DVR capabilities which allow users to start any show at any time.

One of the major features of an Apple-made cable box could be access to the company's rich history of user-friendly UIs. Sources familiar with Apple's plans say the set-top box may use iconography similar to iOS, perhaps akin to the interface seen on the current Apple TV. The design and layout may change if and when the rumored device is released, though the UI is expected to be a vast improvement over the much maligned solutions presented by existing cable boxes.

The sources go on to say the box's DVR capabilities would be rooted in the cloud, with users able to access content stored on off-site servers. While some cable operators offer features similar to a cloud-based DVR, including Time Warner's "Start Over," a comprehensive solution that allows users to start and stop shows at will has yet to enter the market. The product which comes closest to having the proposed feature set would be TiVo, however that device stores shows on-site, not in the cloud.

It appears the set-top box will be an advanced version of the current Apple TV, which is limited to streaming content from iTunes, Hulu and other internet sources. With the introduction of live television and cloud-based DVR functionality, the rumored device could solve many gripes cable subscribers have with their existing service. Apple reportedly wants to allow viewers access to all episodes of current TV shows as well as older seasons, a feature most providers limit to a select amount of previously-aired content.

Other features Apple may be looking into are integrated social networking like sharing TV shows through Twitter, as well as AirPlay functionality which would offload content to supported iDevices.

Thursday's report comes a day after rumors surfaced that Apple was in talks with a number of cable providers over introducing a branded cable box solution. It remains unclear how far along talks are, or if Apple is even close to closing some sort of deal, however the company may face an uphill battle in persuading cable operators that have traditionally been cool to the idea of a tech company entering their market. According to inside sources, late Apple cofounder Steve Jobs was not in favor of partnering with regional cable operators because their limited reach could cause a number of operability issues.

Entertainment companies are also an issue as they own a large portion of what is broadcast on cable networks, making it difficult for Apple to reach agreements with cable operators. A particular point of contention is the cloud-based DVR concept, with sources saying the idea could force content owners to extend cable companies' rights over content if the Apple box sees release. One person familiar with the matter said Apple may negotiate directly with the entertainment companies, leveraging media already available through iTunes.

The fresh rumors follow growing sales of Apple's self-proclaimed Apple TV "hobby," which amounted to 1.3 million units during the three month period ending in June, up 170 percent year-to-year. During the company's third fiscal quarter conference call in July, it was announced that the Apple TV had an installed base of 6.8 million, boosted by 2012 fiscal year sales of 4 million units, a result that CEO Tim Cook called "pretty incredible."