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Analyst: Apple is Interested in TiVo

by , 3:55 PM EST, February 23rd, 2005

Apple Computer is interested in buying digital video recorder (DVR) pioneer and market leader TiVo, according to a Wall Street Analyst.

"What we hear on the street is that Apple is interested in their business and that they are a takeout target," analyst Steven Kroll Jr. of Monness, Crespi, Hardt & Co. told Reuters.

While the TiVo has become the Macintosh of the DVR market, with its users often described as die-hard and fanatical fans, the company has been viewed harshly by Wall Street because of its inability to grow its subscriber base fast enough to become profitable.

This was ameliorated somewhat when the company reported last week that it had added 698,000 subscribers, bringing its total subscriber base to more than 3 million.

Still, concern about TiVo's subscriber base has resulted in the company's stock losing much of its value in the last 12 months, falling from a 12-month high of US$10.80 per share in March 2004 to as little as $3.40 per share in recent weeks. Today, the stock jumped some 20% in heavy trading as rumors of a potential takeover from Apple swept the Street.

Other companies, including media giants Time Warner and Comcast, and its erstwhile satellite TV partner DirecTV have also been discussed as potential suitors in recent months, but none of those rumors moved the stock like today's talk of Apple.

Reuters also listed Sony and Liberty Media as being mentioned as potential suitors.

TiVo CEO Mike Ramsay, who recently announced he would step down from that position, has repeatedly said his company was not for sale, but the company's low market cap of $354 million has fueled takeover speculation.

There is more information in the full article at Reuters.

*In the interest of full disclosure, the author holds a small share in both APPL stock and TIVO stock that was not an influence in the creation of this article.  

Observer Comments

Show: Subjects Only | Full Comments
Close Name:DeepDish Posts: 57 Joined: 25 Jun 2001
Subject: Play it smart Apple

This is a big move Apple. Don' t mess up. Play your cards right and learn from your past mistakes.

I hope it works.

DeepDish

Close Name:Guest
Subject:

I dont think so. Apple would need to explain why? WTF does apple want a DVR for? Thats not computing, apple doesnt do TV.

Close Name:kenaustus Posts: 602 Joined: 27 Jun 2003
Subject: Could be a major opportunity

Apple & TiVo combined would be fantastic and cost less than 10% of their cash holdings. The potential opportunities are stronger than with any other company TiVo could merge with simply because of the innovation that Apple could bring to the party and the technology TiVo brings.

Wouldn't recommend selling your stock in either, Bryan.

Close Name:Guest
Subject: RE: Guest

What are you talking about? Apple bought software companys to get Final Cut Pro, iTunes, and iDVD. This would be a great step for them if they do it right.

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject:

Quote
Anonymous wrote:
I dont think so. Apple would need to explain why? WTF does apple want a DVR for? Thats not computing, apple doesnt do TV.


Well, how about this:

Apple re-writes the Tivo software so that it runs on OS X and Windows. You now have 3, all new options for Tivo:

1) Buy a normal, Tivo box for $100 and use it like you do now.

2) Buy a tiny, cheap Tivo box with no hard drive. It sits on your TV but is connected to your Mac or PC in the next room. The software runs on that and you use your computer hard drive to save shows. It also works the other way. You can buy movies or TV shows on iTunes now, and stream them to the Tivo box on your TV set.

3) Buy a Mac mini and put it on your TV. Works like #2, only much easier and more direct. Plus you can surf the net on your TV. Devices like this have always failed in the past because they were expensive and you don't really NEED to surf the net on your TV. But hey, if you can buy something that's a Tivo AND a computer, why not?


Once they've got all that, I'm sure you can find lots of ways to fit the iPod into those plans. (I'm thinking of 2 or 3 already.)

I just made all that up in 2 minutes. Imagine what Apple could be thinking up.



Last edited by Small White Car on Wed Feb 23, 2005 5:57 pm; edited 1 time in total
Reply | Quote
Close Name:Mace Posts: 9564 Joined: 07 Aug 2003
Subject:

Rumor of Apple buying Tivo had been around for quite some time. Apple needs some of Tivo's technology not the whole company. Is it worthwhile to buy the whole company?

Close Name:Guest
Subject: Apple would pay with AAPL, not cash

Someone mentioned this would only cost Apple 10% of the 3 Billion+ they have in cash.

Rarely do you see cash transactions for companies, even "small" ones like TIVO. They are usually done with stock swaps trading 10 shares of TIVO for one AAPL or the like.

Close Name:Guest
Subject: Yeah, It's worth it to buy the company

Quote
Mace wrote:
Rumor of Apple buying Tivo had been around for quite some time. Apple needs some of Tivo's technology not the whole company. Is it worthwhile to buy the whole company?


Tivo has a good brand name and a customer base that is larger than the 0 customers Apple has in this market. It is a strategy Banks used in the 90's to expand into a new state they did not service - buy up s small, or set of small banks that have existings branches and customers, then convert over and expand from that user base instead of going it from ground zero.

People like "Tivo" and Tivo is considered to have the best interface around. Apple will never have the distribution channel of the Cable providers who all but giveaway their DVRs with service, but Apple would be able to provide content, especailly if the rumors Pixar/Sony thing was for real.

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject:

LOL "What we hear on the street". Why do I get the feeling this is just another analyst playing to all the Apple Media Center people for attention.

Apple can do whatever they want with whatever kind of Tivo device they like, but as I've said before, there is no escaping the fact that the ideal implementation in terms of simplicity and functional ability involves being integrated with the cable box. A while back someone had mentioned the coming CableCard technology as a solution to this problem and that would indeed work. But it seems rather far off. And besides, with all of the crazy standards flying around and shifts in technology that are occuring, I just don't see a space that is big enough or comfortable enough to allow Apple to create the type of product they would want to create. Perhaps in a few years things will be settled down enough. Maybe. I'm not sure what technology Tivo would have that Apple would actually need and not be able to develop even better in house. Maybe when Tivo is on the brink of destruction, Apple can buy up their patents.

And just for the record I love my Tivo.

Close Name:zpok Posts: 80 Joined: 06 May 2004
Subject: regardless

Quote
Guest wrote:
I dont think so. Apple would need to explain why? WTF does apple want a DVR for? Thats not computing, apple doesnt do TV.


Regardless of the rumour being true: "I don't think so. Apple would need to explain why? WTF does Apple want a music store for? That's not computing, Apple doesn't do music.

Feel free to do the same for desktop printing, scanning, photo-editing, ...
Computing is so last century...

Close Name:Smith Posts: 13 Joined: 16 Feb 2005
Subject: Mac Mini No Tivo

Apple will have to buy Tivo for their hardware. I feel sorry for the iDisciples who buy the Mac Mini thinking they will record and watch HD content. Then they buy all of the extras like a wireless bluetooth adapter for a "remote," because the Apple one-button mouse doesn't work well when pushed on the carpet of their living room floor. And an external hard drive, and an EyeTV recorder to hook up to their Mini. Then their neighbors will come over and look at all of the devices attached to the Mini and ask, "What is that?!" And the iDisciple will tell them, "It is convergence!" LOL.

Close Name:Guest
Subject: re: Mac Mini No Tivo

Chuckle, that's true, sort of.

Although I'm not sure very many people buying Mac Mini's are imagining that they're Tivo's, or that they offer the same functionality.

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject:

Quote
Smith wrote:
Apple will have to buy Tivo for their hardware. I feel sorry for the iDisciples who buy the Mac Mini thinking they will record and watch HD content. Then they buy all of the extras like a wireless bluetooth adapter for a "remote," because the Apple one-button mouse doesn't work well when pushed on the carpet of their living room floor. And an external hard drive, and an EyeTV recorder to hook up to their Mini. Then their neighbors will come over and look at all of the devices attached to the Mini and ask, "What is that?!" And the iDisciple will tell them, "It is convergence!" LOL.


So you think Apple needs to buy an entire company...for their remote control? I'm pretty sure then can come up with one of those on their own.

I think the important part of Tivo is the subscription service, the current customers, and the means of transporting and encoding the video. THAT's the stuff that they can't invent on their own. If they had that then Apple can merge it with any hardware they currently have or wish to make up. Yeah, they'll probably keep the current Tivo boxes, but they'd probably start integrating the service into other products as well.

Close Name:Guest
Subject: Remote Patent

Quote
Small White Car wrote:
Quote
Smith wrote:
Apple will have to buy Tivo for their hardware. I feel sorry for the iDisciples who buy the Mac Mini thinking they will record and watch HD content. Then they buy all of the extras like a wireless bluetooth adapter for a "remote," because the Apple one-button mouse doesn't work well when pushed on the carpet of their living room floor. And an external hard drive, and an EyeTV recorder to hook up to their Mini. Then their neighbors will come over and look at all of the devices attached to the Mini and ask, "What is that?!" And the iDisciple will tell them, "It is convergence!" LOL.


So you think Apple needs to buy an entire company...for their remote control? I'm pretty sure then can come up with one of those on their own.

I think the important part of Tivo is the subscription service, the current customers, and the means of transporting and encoding the video. THAT's the stuff that they can't invent on their own. If they had that then Apple can merge it with any hardware they currently have or wish to make up. Yeah, they'll probably keep the current Tivo boxes, but they'd probably start integrating the service into other products as well.


Actually, TiVo has a bunch of patents on its remote control:

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2Fsearch-adv.htm&r=0&p=1&f=S&l=50&Query=an%2Ftivo+and+ttl%2Fremote&d=ptxt

and on a bunch of other DVR technologies:

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2Fsearch-adv.htm&r=0&p=1&f=S&l=50&Query=an%2Ftivo&d=ptxt

Close Name:Guest
Subject: Apple would be nuts not to buy TiVo

This is apple's only real chance to get into the living room. If apple doesn't buy tivo, someone else will. Like microsoft. ONce you have media machiens plugged into your living room, all the sudden, downloading music onto your living room console seems like a lot less of a hassle than doing it on your computer. Not to mention videos.

I PRAY they buy TiVo before it's too late.

Close Name:iggyb Posts: 112 Joined: 09 May 2003
Subject: Microsoft is biting their nails

M$ is trying desperately to get into the "home media market". As hard as they're trying with music, it ain't workin' for them. Next, of course, comes video. If Apple can buy TiVo, I imagine that Jobs and Co. will create something that will have success similar to the iPod. Let's hope this happens.

Close Name:Mace Posts: 9564 Joined: 07 Aug 2003
Subject:

If future TV content is available via on demand, is TiVo still relevant?

The encoding format for content is MPEG4.

Close Name:Guest
Subject:

Mac idiots.

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