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Apple television is still a long way off, says analyst

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It’s been a while since we’ve heard anything about an Apple television — a mythical device that has repeatedly flooded the blogosphere over the past year. And now it seems as though we’re going to have to wait a bit longer before any concrete information comes out of Cupertino.

Fortune’s Apple editor Philip Elmer-DeWitt reports that Pacific Crest market analyst Andy Hargreaves released a “company update” memo today regarding Apple’s television plans. The memo was written after a meeting between Hargreaves, Apple CFO Peter Oppenheimer, and Eddy Cue, Senior Vice President of of Internet Software and Services. In short, Hargreaves estimates that the Apple television problem is far from cracked thanks to Hollywood’s lock on content distribution.

Here is the portion of the memo published by Elmer-DeWitt:

An Apple Television Appears Extremely Unlikely in the Near-term

Relative to the television market, Eddy Cue, Apple SVP of Internet Software and Services, reiterated the company’s mantra that it will enter markets where it feels it can create great customer experiences and address key problems. The key problems in the television market are the poor quality of the user interface and the forced bundling of pay TV content, in our view. While Apple could almost certainly create a better user interface, Mr. Cue’s commentary suggested that this would be an incomplete solution from Apple’s perspective unless it could deliver content in a way that is different from the current multichannel pay TV model.

Unfortunately for Apple and for consumers, acquiring rights for traditional broadcast and cable network content outside of the current bundled model is virtually impossible because the content is owned by a relatively small group of companies that have little interest in alternative models for their most valuable content. The differences in regional broadcast content and the lack of scale internationally also create significant hurdles that do not seem possible to cross at this point.

We have reached out to Hargreaves for further comment, but have not yet received a response.

Earlier this month, the Wall Street Journal reported that Apple is currently in talks with major cable service providers about the development of an Apple set-top box that would have live TV capabilities, as well as DVR functionality. Similar to Hargreaves’s assessment, WSJ indicated that Apple has not yet reached a deal with any of the cable operators, and that may be because of “the reluctance of operators to let Apple establish a foothold in the television business.”

Talk of an Apple-branded television hit a fevered pitch last October after the release of Walter Isaacson’s biography of late Apple co-founder and CEO Steve Jobs, who is quoted in the book as saying he had “finally cracked” the problem of producing a television that lives up to Apple’s user experience standards.

Piper Jaffray’s Apple analyst, Gene Munster, is one of the people most responsible for spreading Apple “iTV”rumors. Back in March, Munster said that the Apple television “is real.” He also proclaimed that it would be “the biggest thing in consumer electronics since the smartphone came out.”

In May, Apple iTV rumors heated up once again after an anonymous source claimed to have seen an Apple television set prototype, and claimed that it had both Siri voice control, and FaceTime video chat functionality.

Well, for now at least, it seems as though we’re all going to have to hold off on our Apple iTV purchasing plans. Which is probably a good thing — more time to save up for what will surely be one of the most expensive televisions on the market, if it ever gets there.

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