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With Apple's anticipated subscription television service said to be targeting a price between $30 and $40 per month, one analyst has predicted that the company will come in on the low end of that range, or else risk pricing itself out of the market.
Rod Hall of J.P. Morgan issued a note to investors on Wednesday, a copy of which was provided to AppleInsider, in which he said a $40-per-month price tag for a subscription TV service would be too high.
In his view, the incremental cost of cable television service from a provider like Comcast, in addition to basic Internet, is less than $40 per month. And so if Apple were to exceed the price of a basic cable package, there would be very little reason for consumers to "cut the cord" and go with a streaming-only solution from Apple.
The rumored price range for the service was first reported on Monday by The Wall Street Journal, which said that Apple could launch the service as soon as September with prices ranging from $30 to $40 per month. At those prices, it would be more costly than the already-available Sling TV from Dish Network, priced at $20 per month.
A key factor in pricing, of course, is exactly what channels Apple's service would offer. Reports have suggested that Apple is in talks with broadcast networks ABC, CBS and Fox, as well as other cable networks owned by Viacom and Discovery, though apparently talks have stalled with Comcast-owned NBC.
But if other content owners forge a deal with Apple, Comcast could find itself forced to play along, based on the terms of the deal it reached with the U.S. Federal Communications Commission in 2011 to purchase NBCUniversal. The final judgment rules that Comcast must treat online video services as essentially equal to cable companies.
Beyond a subscription TV service, Hall has also predicted that Apple will launch new Apple TV hardware, potentially with the same A8X chip found in the iPad Air 2. He believes it would be accompanied by a new App Store for the Apple TV that would allow users to download games and other content, competing more directly with modern game consoles like the Xbox One and PlayStation 4.