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Can Apple's iPad Save Cable?

By Rick Aristotle Munarriz | More Articles
November 15, 2010 | Comments (2)

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The cord-cutting continues at cable providers, but Comcast (Nasdaq: CMCSA ) isn't going down without a fight.

The country's largest cable company is introducing the Xfinity TV app for Apple's (Nasdaq: AAPL ) iPad this week.

Like other apps being cranked out by cable, satellite, and broadband television rivals, the program will transform Apple's popular tablet into a touchscreen device capable of spitting out TV listings and program Comcast DVRs.

However, the real treat comes next month, when Comcast's digital television subscribers will be able to watch movies and shows through the Xfinity TV app on their iPad. No matter where an iPad owner goes, Comcast content can stream as long as they have an online connection.

It's not just an iPad treat. Comcast's development team is working on similar apps for Apple's smaller iPhone and iPod touch devices, as well as options for owners of gadgetry powered by Google's (Nasdaq: GOOG ) Android and Research In Motion's (Nasdaq: RIMM ) BlackBerry.

Comcast needs this. It closed out its third quarter with just 22.9 million video customers, 822,000 fewer than it watched over a year ago. At this pace, Netflix (Nasdaq: NFLX ) will overtake Comcast to become the country's most popular premium television service next year.

Netflix has grown in popularity, keeping churn in check by growing its digital catalog that is made freely available to subscribers on unlimited DVD plans. Comcast and other cable giants are following suit, hoping to give subscribers more incentives to stick around that don't involve slashing their cable bills.

It's not just Comcast losing cable television accounts. Time Warner Cable (NYSE: TWC ) and Cablevision (NYSE: CVC ) also shed net subscribers in their latest quarters.

One can argue that the cable giants deserve the defections. Cablevision rakes in an average of $149 a month from its cable television customers. More and more couch potatoes are going to realize that they're not watching as much traditional television as they used to, given the popularity of streams through Google's YouTube and Netflix.

Comcast is trying to get ahead of the defections with a promising Xfinity TV app. Unfortunately, the best that Comcast can hope for is that it slows down the cancellations. Cord-cutters are growing in number, and they seem to be doing just fine without cable.

Will convenient and portable streaming save the cable industry? Share your thoughts in the comment box below.

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Google is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers pick. Apple and Netflix are Motley Fool Stock Advisor choices. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz is starting to see more Apple products creep into his home lately. He does not own shares in any of the companies in this story, except for Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On November 15, 2010, at 3:21 PM, InfoThatHelp wrote:

Say what you may on the non-existent playbook, the iPad is an excellent machine upon which many iPad clones are based on, selling briskly in the millions, adopted by very many enterprises in use all over the world, and with Apple Inc. as the world's leading innovator, is guaranteed to be at the top of the industry. Just look at how every other competition is targeting Apple.
iPads are selling extremely well at Walmarts. Just about every advertising campaign is offering iPad as a prize. Eg., house sales, shopping mall contests, sales campaigns, air flight promotions, beauty pageants, scholarships, etc.
Report this Comment On November 15, 2010, at 5:17 PM, SkippyJohnJones wrote:

Excellent analysis @RealMillerMan. You did a good job of breaking down the weaknesses of iPad and the strengths of Playbook, it a way that is pertinent to the article. I especially liked the part where you declared that a non-existent product has zero flaws.
I think the Xfinity app is a game changer for Comcast. I'm a subscriber who suddenly sees much less value in Netflix and much more in my existing cable service. The problem with Netflix is its lack of live, or even recent, programming. On demand is imperfect, but it allows users to catch up on shows they just missed. If I can take this on the go with me, the on demand streaming alone justifies premium channel subscriptions. Netflix does not, and likely won't soon, have the breadth of TV programming that a cable provider can offer.

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