I may be swimming against the tide here, but the rumors
surrounding the potential acquisition of TiVo by Apple has really got the blog
mill running overtime. While everyone
likes the idea of Apple buying TiVo (hey, they’re both swell companies and TiVo
really deserves a nice place to retire for the long twilight of its life), I
still haven’t heard a single compelling argument as to why Apple would be
better off after such a transaction. I
think that’s because they’re isn’t any, or at least if there is, it’s a reason that’s
not obvious. (I can, however, think of
plenty of reasons why it would make some TiVo customers fall in love all over
So here are a few reasons why people seem to think it might
happen, and why none of these reasons make any sense…
has lots of loyal customers. Yes, but these happy customers are not really profitable at this point (as a
matter of fact, a lot actually appear to be ready to start finding those
nails for the coffin) and TiVo's existing model of subsidizing hardware
with service fees isn't Apple's model (Apple likes to make money on their
hardware, software, and services). Apple would want to roll out their own devices at the next upgrade
(Jobs seems to like controlling the whole user experience). How many of those 3 million customers would
convert? DirecTV's consumers
probably wouldn't because News wants to push NDS anyway (plus DirecTV
TiVos are going to be very obsolete very soon). In the final analysis, TiVo has customers, but they don't really convert very smoothly, no matter how passionate they are. The main customer growth would come after the acquisition and Apple doesn’t need TiVo to show it how to acquire loyal customers.
- TiVo has great engineers. Yep, they do. And the Strangeberry acquisition did a lot for the brain trust over at TiVo. No doubt they have an excellent engineering team that will continue to try to innovate in the face of a repressive market environment. But you know what; Apple has some pretty crack developers as well. Last I checked, they had a lot more of them and could probably even hire a few more for a lot less than $388MM.
- TiVo has a nice UI. Well yes, but Apple is probably one of the few companies that could outdo them. Apple’s whole core competency is making stuff like TiVo really easy to use. As good as TiVo's UI is, Apple would replace it with something better, Mr. Jobs would have it no other way.
- TiVo is a great brand. Again, yes, it is a great brand, but Apple is better. Apple would subsume the brand name relatively quickly and replace it with some thing more Apple-like (maybe iTV or something). Another unfortunate factor is that with all this TiVo death watch stuff going on, TiVo just might find itself “Munsoned” (oblique ref. to Kingpin) That won’t be no wagon to hitch Apple’s rocket ship to.
- TiVo has IP. This is the one place TiVo has some potential value, but I don’t think Apple is the kind of company to buy a bunch of patents to go sue everyone else. They could use it defensively once they were in the market, but Apple is an innovative company, not a SCO.
- TiVo has domain expertise. Well, so does Apple. A PVR is not a difficult thing to build. Integrating with the cable/satellite providers is the bitch and Apple knows it. Jobs has said this is the primary reason why he would avoid the market, he doesn’t want to deal with those guys. Nothing has changed since he made those statements; in fact the situation has gotten worse. Apple is not in the business of selling through channels, especially pain-in-the-ass channels like the cab/sat guys.