Apple TV Effort Said to Be Led By ITunes Creator

By Adam Satariano - Oct 25, 2011 11:01 AM GMT+0700
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Steve Jobs, chief executive officer of Apple Inc., speaks to members of the media during an Apple product unveiling event in San Francisco, California, U.S. Photographer: David Paul Morris/Bloomberg

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Oct. 24 (Bloomberg) -- Brian Marshall, an analyst at ISI Group., and Paul Kedrosky, author of the Infectious Greed blog and a Bloomberg contributing editor, talk about Apple Inc.'s business strategy and Steve Jobs's legacy. Apple is turning to the software engineer who built iTunes to help lead its development of a television set, according to three people with knowledge of the project. Marshall and Kedrosky speak with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Apple Inc. (AAPL) is turning to the software engineer who built iTunes to help lead its development of a television set, according to three people with knowledge of the project.

Jeff Robbin, who helped create the iPod in addition to the iTunes media store, is now guiding Apple’s internal development of the new TV effort, said the people, who declined to be identified because his role isn’t public.

Robbin’s involvement is a sign of Apple’s commitment to extending its leadership in smartphones and tablets into the living room. Before his Oct. 5 death, Apple co-founder Steve Jobs told biographer Walter Isaacson that he had “finally cracked” how to build an integrated TV with a simple user interface that would wirelessly synchronize content with Apple’s other devices.

“It will have the simplest user interface you could imagine,” Jobs told Isaacson in the biography “Steve Jobs,” released yesterday by CBS Corp. (CBS)’s Simon & Schuster.

Trudy Muller, a spokeswoman for Cupertino, California-based Apple, declined to comment. Outside of Jobs’s remarks in the book, Apple hasn’t acknowledged that it’s developing a TV set. And according to one person, it’s not guaranteed that Apple will release a television.

Until now, the company’s TV efforts have been limited to Apple TV, a small $99 gadget that plugs in to a television and gives users access to content from iTunes, Netflix Inc. (NFLX)’s streaming service and YouTube. Jobs had called it Apple’s “hobby,” rather than something designed to be a serious moneymaker.

Prototype Model

That may be changing. Apple has a prototype TV in the works and may introduce a product for sale by late next year or 2013, according to Gene Munster, an analyst with Piper Jaffray Cos. He based that timing on meetings with contacts close to Apple’s suppliers in Asia, industry contacts and Apple’s patent portfolio. Munster said Apple also is investing in manufacturing facilities and securing supplies of LCD screens.

Apple’s introduction of the voice-command software Siri and Web-storage service iCloud also could be used for a future television, Munster said in a note to investors yesterday. Siri may help search for videos, while iCloud allows customers to store video, music, pictures and other content on the company’s servers instead of their own hard drives.

Searching for Shows

One of Apple’s goals for a new TV is to let users more seamlessly search for a show or movie, said one of the people. For example, instead of having to separately check to see if a movie or show is available through Netflix or a cable service, all the material could be integrated, this person said.

One challenge will be getting makers of movies and television shows to change how they make their content available. Apple has considered adopting new business models for delivering video, including a subscription TV service, media executives said last year. Those talks didn’t lead to a deal.

Building a full TV set would put Apple in closer competition with consumer-electronics companies such as Samsung Electronics Co. and Sony Corp. (SNE) Apple could sell 1.4 million TVs next year, out of about 220 million flat-panel sets for the total market, according to Munster. That could add $6 billion in revenue to the company’s top line by 2014, he said.

Google Inc. (GOOG), which competes with Apple in the smartphone market, also is attempting to attract customers to an operating system it has created for televisions. Unlike that approach, Apple would be building both the hardware and the software.

Apple rose 3.3 percent to $405.77 at the close in New York yesterday. The shares have climbed 26 percent this year.

SoundJam Player

Robbin, the software engineer helping lead the TV effort, was hired in 2000 to develop iTunes after Apple bought the SoundJam digital music player he developed. ITunes, introduced in January 2001, became Apple’s digital hub for synchronizing music, video and applications across Apple’s devices, including the iPod, iPhone and iPad.

According to the biography, Jobs considered Robbin such a valuable employee that he wouldn’t let a Time magazine reporter meet him without agreeing not to print his last name, for fear that he would be poached by a competitor.

Robbin was among the Apple executives who helped persuade Jobs to allow computers running Microsoft Corp. (MSFT)’s Windows software to use iTunes, according to the biography, a move that helped the company add millions of new customers. The iTunes digital store, with more than 225 million registered users, generated almost $1.5 billion last quarter.

Robbin also was closely involved with the development of the iPod, including participating in a crucial 2001 meeting when Apple decided on the spin-wheel design of the digital music player and charted its expansion beyond personal computers to mobile computing, according to the book.

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net