I have been a TiVo user for over a decade and love the system. It is probably the one entertainment system that I would hate losing. It has a great user interface and from the little bit I have played around with other DVR system I have found them to be sorely lacking when trying to match TiVo. TiVo is a company that I believe Apple should buy to enhance its competitive position in the television space. (Note that I own Apple shares).
DVR functionality would be helpful
While TiVo’s controller has many more buttons than Apple’s its overall functionality is top notch. A combination of TiVo’s controller and on-screen interface would be a strong addition to Apple’s TV strategy. And while I don’t have the new TiVo Bolt the function that allows you to watch a show 30% faster and hear audio at a regular pitch sounds like a great feature (note that QuickMode is also available on some earlier models).
TiVo has a strong patent portfolio
TiVo has been awarded about 467 foreign and domestic patents and has approximately 332 foreign and domestic patent applications pending. One key, if not the key, patent is U.S. Patent No. 6,233,389, titled “Multimedia Time Warping System” which describes an invention that allows a user to store selected television shows while the user is simultaneously watching or storing another program. However it is scheduled to expire in July 2018, which could negatively impact TiVo’s business.
One indication of TiVo’s patent position is the $1.6 billion it has received from intellectual property litigation. This has included $490 million from Google and Cisco, Verizon for $250 million and $500 and $215 million from DISH and AT&T, respectively.
TiVo would cost Apple less than $2 billion
In its October 2015 financial results TiVo had $141 million in cash and cash equivalents, $530 million in short-term investments and $185 million in convertible senior notes for a net cash position of $486 million. This is 59% of its $826 million market cap with a share price of $8.68. Even if Apple were to match TiVo’s five year high of about $19 it would only cost Apple about $2 billion or 10 days of its free cash flow.
