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Apple iTV May Turn DirecTV Into The Next Palm

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Apple Store Chicago (Photo credit: jeffwilcox)

For a while there has been no shortage of speculation about a new TV from Apple (AAPL).  Recently, Tim Cook, CEO of Apple stoked the fire by making vague comments about the company’s future in the television business.

The speculation ranges from a full-fledged TV set to a big upgrade of existing Apple TV.  It has been like a blank canvas that so-called gurus have been painting on to their heart’s content because there is no way to confirm or reject any speculation.

Michael White is no run of the mill commentator speculating on Apple TV.  White is the chairman of DirecTV (DTV).  I paid special attention when he spoke about Apple TV to Gigaom last Friday.  He is a TV industry insider and should know more than the legions of commentators whose favorite pastime has become speculating on Apple TV.  White’s comments seem to be directed at a new set-top box from Apple as opposed to a TV panel.

There is no denying that over years DirecTV interface has evolved and has a large number of satisfied users.  However, White’s claim that Apple will not make his technology obsolete does not inspire much confidence. "“Typically with technology, it smashes the cost structure in some new way (but) with content costs, rights fees and the cost of spectrum it’s hard to see (it) obsoleting our technology,” he told Gigaom.

I have no substantive real information about what Apple is cooking for the TV business, but DirecTV interface lacks some obvious features that Apple can implement including Siri and something similar to Kinect from Microsoft (MSFT).  Siri is an intelligent voice assistant from Apple, and Kinect allows control of Xbox 360 with gestures.

If past is a prologue, Apple TV may obsolete DirecTV interface.

Before Apple introduced iPhone, Palm CEO Ed Colligan expressed doubts about Apple succeeding.  Palm had spent years perfecting first a hand held device and then a phone.   Colligan did not think that Apple could come up with something so compelling that it would end up dominating the phone business.

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Is a fate similar to Palm in store for set-top boxes from DirecTV, Dish Network (DISH), Comcast (CMCSA), and Time Warner Cable (TWC)?  Don't rule it out.

About Me: I am an engineer and nuclear physicist by background. I have founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com.

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Full disclosure: Subscribers to The Arora Report are long Apple from $131 and have taken partial profits at $360, $525 and $629.