Apple Inc., inventor of the iPad tablet, iPhone mobile device, and Watch wearable, has announced that the company's live TV service provided through the Internet will be delayed until 2016. That is due to stalled negotiations with television networks such as CBS and 21st Century Fox, reportedly a result of the tech giant's computer network capacity not being large enough.
Apple plans to announce its delayed TV streaming service at a Sep. 9 event. Instead of launching it in time for the fall's network TV season, the California-based company will unveil an upgraded version of Apple TV, its set-top box, according to Bloomberg.
However, customers must use alternate options to watch live network television, including cable or satellite TV. They could also use an old-school antenna.
The issue at stake is the price tag of content. Steve Jobs' co-founded company wants to offer a package of channels for $30 or $40 per month, according to Toronto Sun. That is about half the average U.S. cable bill.
In fact, Apple has been searching for over a decade for the right blend of channels that would create a $40 package for "cord-cutters." It is unclear when the current negotiations will be done.
Apple is looking for products and services to boost long-term growth. iPhone sales figures are slowing down, Apple Watch sales are moderate, and its revenue is projected to grow only 5.3 percent in 2016, about one-fifth of this year's figures.
David Ives is an analyst at FBR Capital Markets. He said that a TV service could produce revenue up to $3 billion by 2018 for the company, while helping to diversify its product line.
Besides securing the content of Apple's TV service, another issue has been developing a computer network that provides continuous viewing for customers across the United States. Shows would have to be stored near viewers.