Why Telcos Would Be Testing an Apple iTV Prototype

One day, Apple is purportedly sourcing parts suppliers for it rumored HDTV project. The next day, actual HDTV prototypes are in the hands of research labs in Canada. Such is the hurried development cycle of a product that currently lives only in rumorspace.
Indeed, no manufacturing challenge is too difficult for Apple when it’s working on a project that doesn’t officially exist.
According to the Canadian newspaper The Globe and Mail, telecom companies Rogers and Bell Canada have in their labs an early prototype of Apple’s rumored television set. Although the possibility of an honest-to-goodness prototype being tested is exciting, the idea that it’s being scrutinized by telco operators is actually the more interesting part of the report.
“Rumors that Apple’s television is in the hands of telcos suggest that they’ve decided to follow the Microsoft model, rather than creating the ‘Apple subscription experience,’” Forrester analyst James McQuivey said. With the Xbox, Microsoft teamed up with Comcast and other providers to push TV and cable services onto its gaming console. If The Globe and Mail‘s report is to be believed, Apple would be taking a similar approach with its TV, rather than providing an a la carte-style subscription service, a tack some have suggested Apple might follow.

“They’re looking for a partner. They’re looking for someone with wireless and broadband capabilities,” The Globe and Mail source said of Apple. Jefferies analyst Peter Misek suggested that in the U.S., the TV would likely arrive on AT&T and Verizon.
“This business model makes the most sense for Apple,” IHS analyst Jordan Selburn told Wired, saying the approach would let Apple completely integrate content from the operator, as well as iTunes. This strategy would also give operators the chance to dip their toes into the set-top box game, Selburn said, giving them “some way to jump on and monetize the video content train” popularized by devices like Roku, Apple TV and Boxee.
Yesterday, a leaked Best Buy survey queried potential buyers about their interest in an Apple-branded TV, fueling further speculation. Last week, a report had Apple reaching out to component suppliers to source the display and other parts for its television set. And these two most recent rumor tidbits follow even deeper speculation regarding the TV’s user experience, size and component suppliers.
As for the prototypes being tested in Canada, Selburn was a bit surprised. “You’d want to go with companies that have the most subscribers,” he said, calling out Comcast as an obvious partner. “Not AT&T and Verizon, or BC and Rogers. Apple doesn’t have a history of doing things in a small fashion.”
Whenever — if ever — Apple’s iTV does come out, it seems poised for success: Wall Street analysts think Apple could snatch up 5 percent of the entire HDTV market.
“The sheer mass of rumors over the past six months seems to indicate this is real,” Selburn said.