Apple Buyout of TiVo Seems Unlikely
Shares of TiVo surged Wednesday and Thursday on speculation that Apple was going to buy the company, but comments by Apple executives that “we strongly believe Apple has no interest in acquiring TiVo” make the deal seem unlikely, according to Forbes.com.
An Apple-TiVo could seem appealing from a technological viewpoint, but when it comes to the numbers TiVo has serious financial problems to consider. Apple stock price has been steadily improving since May of 2003, easily beating the Dow Jones industrial average, Nasdaq, and S&P 500 benchmarks. Conversely, Tivo has failed to beat those averages since the summer of 2004.
Shares of TiVo have been trending downward since January 2004, and its stock has fallen 37% since the beginning of the year. In terms of digital convergence and television, TiVo’s biggest asset is its strong foothold in the market and not their technology, according to an AP wire report.
Despite its loyal consumer base, TiVo has never had a profitable quarter. In an interview with AppleMatters, TiVo spokesperson David Shane declined to comment on the likelihood of a buyout. “I hate to disappoint,” said Shane “TiVo does not comment on rumors or market speculation.”
However, his comments on the new product TiVotogo, unveiled at CES, are reminiscent of the “take it with you” marketing campaign by Apple with the iPod and the iMac G5
In a press release TiVo recently announced its subscription base had exceeded three million.
“Last year, we launched an aggressive growth plan that included increasing our subscription acquisition spending to grow our base, strengthen our market position, and fuel our recurring revenue model,” said Mike Ramsay, TiVo’s Chairman and CEO said in the release. “We accomplished our goal of doubling our sub base to over 3 million subscriptions.”
Apple might also be wary of another company benefiting from being related to the iPod. According to a Marketwatch report, Seagate Technology, Synaptics inc. and Sigmatel have all benefited from deals to manufacture technology for Apple. Apple is known for expecting manufacturers to keep business arrangements secret. Given the recent breach that Synaptics inc was manufacturing the touchpad technology, Apple might be wary at involving itself with another company. An Apple spokesperson could not be reached for comment.
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Comments
I find it interesting how everyone sees Tivo only for its brand and loyal user base.
But no one has commented on Tivo’s other technology which they acquired in 2004 (Strangebarry).
Strangebarry is essentially a broadband home entertainment LAN that is scalable for new formats—that are not even in the marketplace.
Granted Apple has Airport, but I think Strangebarry goes way beyond that.
Alex-NYC
That sort of information is reserved for people who actually want to provide thoughtful analysis of the situation. Hell anyone can see that Tivo is facing incredible pressure from the Cable Co DVRs and losing money. Those are obvious things that any person can look up on their own.
What people want to read is the items that they don’t know. We want to know about Strangeberry and Arthur Van Hoff of Sun Microsystem/Marimba fame. We want to know what potential Patents Tivo has that Apple may be able to benefit from. We want to know why Tivo is high on their “Tahiti” platform for the future. We want to know how CableCARDS will help Tivo compete against the Cable Cos.
In short we want to read online journalistic articles that exceed the quality that we can write ourselves. I’ve yet to see one Apple-Tivo article that had any shred of information that was useful beyond the drole “Tivo’s losing money and it’s clame to fame is its name”
Yawn. If you think programming DVR software is all that easy then why does the Mac have a dearth of DVR programs like mythTV and Freevo?
Apple may not buy Tivo but with 3 million paying subscriber,a working infrastructure, interesting talent(AVH) on hand and name recognition. Apple will be hard pressed to create the same for less than 400 million dollars R&D IMO of course.