Putting A Satellite Into Orbit: A Great Use For AAPL's Cash?

Dec.30.11 | About: Apple Inc. (AAPL)

Here’s a long-shot prediction for 2012. Apple (NASDAQ:AAPL) uses its $80+ billion to launch a few of its own satellites.

Good use of capital? Could be. That’s what it might take for Apple TV is to become universally available.

In reading Walter Issacson’s biography of Steve Jobs and hearing some of the author’s reflections, some say that near the end of his life Steve had “solved” the challenge of Apple TV.

If he did solve that challenge, it has nothing to do with technology. It has everything to do with esthetics.

Here’s why: Apple could easily embed all the technology you need into one amazing display device. It would be beautiful, except you’d have to connect it to your box. Unless you’re tech-savvy you have to have at least one box, right? It could be from a satellite, cable, or optical fiber provider, but that’s how you’re going to have to get content like ESPN, C-SPAN, CNN, Bloomberg, local stations, etc.

Are you going to be able to control that box through your iPad or iPhone? Sure, if companies like Comcast (NASDAQ:CMCSA) TimeWarner (TWC) , DirectTV (DTV) , etc. decide to cooperate. If not, then the Apple TV experience will not be “insanely great.”

Describing the period of developing the iPhone and iPad, Steve Jobs said his view was that if you had to use a stylus, the product would be a “fail.” Remember how many people used styluses back then?

If you bring home an Apple TV and you have to plug it into a Comcast box, that’s an epic fail. Believe me, that extra remote sitting on the table would drive Steve Jobs absolutely bonkers. I think the team at Apple knows this.

Partnering with content and access providers

I’m sure there will be plenty of organizations willing to provide content directly through Apple TV, but it won’t be everything. It won’t be a complete palette of all the stuff you get with basic cable unless access providers, the Comcasts of the world, agree to hop on board and make your life easier.

Will they? If so, then can we expect to learn of an Apple/Comcast partnership? I’m only speculating, of course, but remember that the iPhone was launched in partnership with AT&T (NYSE:T).

Back then it seemed annoying to me to be tied to one network provider. But evidently, it wasn’t such a big hurdle.

Unfortunately, that approach won’t work for TV. When the iPhone was launched, AT&T could serve nearly anybody. You might not like it, but the service was probably there.

But there’s no one cable provider who serves nearly the entire US. Take a look at the map. It’s all a jumbled fractured mess.

But a satellite company like DirectTV might work. Perhaps an Apple/DirectTV partnership?

That doesn’t have a great ring to it. Apple needs its own content delivery system– for TV and mobile. What better way than having your own satellites? One quick launch from Cupertino would open up worldwide potential !

I know it seems absurd, but I hope this is some good insight into the challenges of launching Apple TV. It’s not a technology challenge, it’s a marketing channel challenge. If that marketing channel issue is what Steve Jobs “solved, then the product will be amazing.

Obviously it doesn’t take a launch into orbit to solve this one little marketing challenge. If so, then that satellite should already have been launched by now. And even secretive Apple couldn’t hide blasting something into orbit.

Or could they? Happy New Year everybody.

Disclosure: I am long AAPL.