Apple Quits Building TVs and Plans to Announce New Set-Top Box and TV Service Next Month

Forget about an Apple Television. Apple decided not to make one more than a year ago. However, multiple sources are now saying that Apple is poised to announce a successor to its old set-top box along with a new TV service.

The quandary over whether Apple will announce a TV is daunting. Adding to the string of rumors is a new report from the Wall Street Journal, which said that Apple already quit on the idea of making TVs more than a year ago. WSJ’s sources said that Apple had a small team assigned to develop a one-of-a-kind TV.

The team was eventually disbanded because the results weren’t compelling enough, sources added. However, Apple’s interest in reimagining the TV is still alive. In fact, sources familiar with Apple’s plans said that the company is focusing instead on improving its set-top box, which it debuted in 2012.

In /4/2013, Tim Cook painted his “grand vision” for the television, although he didn’t say if Apple is working on a fully-functioning TV. Now sources are saying that the redesigned Apple TV set-top box will be slimmer and will feature a revamped software as well as a new remote control.

Apple is also working on an online TV service, which could debut at WWDC next month. The TV service, sources said, will start programming this fall. Apple has reportedly signed exclusive deals with programmers to offer bundles of TV programs and channels over the Internet.

Additionally, BuzzFeed is backing up the WSJ story. The media company, citing its own sources, says Apple is preparing to launch a next-generation Apple TV set-top box that will have its own App Store and SDK. As of this writing, Apple has once again lowered the price of its Apple TV, from $99 to $69. Is this price cut a sign of a successor?

Apple’s obsession with TVs started a decade ago when iTunes extended to video. Apple reportedly created a TV prototype in 2000 that had a transparent display and lasers to display content. But Apple iced the development of the prototype because it required lots of power. Apple also experimented with cameras and a FaceTime for TV, people familiar with Apple’s plans said.

Meanwhile, Apple’s top investor, Carl Icahn, believes that Apple will release an Apple TV next year. In an open letter to Tim Cook, Icahn said that Apple is making a dramatic push into the TV market.

“While we respect and admire Apple’s predilection for secrecy, the company’s aggressive increases in R&D spending (and some of the more well-supported rumors) have bolstered our confidence that Apple will enter two new product categories: television and cars,” he said.

Mr. Icahn is also urging Tim Cook to buy back more shares. He says that Apple is undervalued and its stock could be worth $240 per share—84 percent above Apple’s current $129.95 share price. Mr. Icahn’s letter caused Apple’s stock to increase to $130.19 per share today after closing—an $8.35 billion market capitalization increase. Apple has yet to comment on the report.