Apple has to control the distribution all the way to the consumer for it to work, and they need to use part of the massive pile of cash they're amassing to achieve it. It reminds me of when Apple decided to take control over their retail experience by opening Apple retail stores. They want no part of the cable companies. That leaves wireless. Current market caps:
• AT&T = $171B
• Verizon = $105B
• T-Mobile = $55B
• Sprint - $8B
AT&T has lots of garbage Apple doesn't want (like credit card services, landline phone service, etc.), and is too expensive anyway. Verizon might be affordable, but they'd have to borrow. Still too expensive. T-Mobile might be affordable, but they're in the process of being bought by AT&T.
That leaves Sprint, which is very cheap (to Apple) at only $8B. Furthermore, Sprint already owes Apple $20B for future iPhones, that makes it even cheaper (if not free). And Apple would immediately sell off or eliminate a bunch of junk they don't need, like the over 1,000 Sprint retail stores. Streaming video requires lots of bandwidth, so let's assume they have to spend a ton of money completing and beefing up Sprint's 4G LTE upgrade, and expanding service area (which could be done over time). Let's say that costs them $25B. So for $25B+, they have a fast, robust, nationwide 4G LTE wireless network. What are the results?
• Apple controls the entire network, and the entire chain of their services, end to end. They can now sell their own wireless plans to iPhone owners signing up with them. Additionally, they can now sell home internet service through the exact same network. And of course, video services. They can make money from this, but it even further cements consumers into the Apple ecosystem, which means more sales of all kinds of hardware, software, and services. And there's even other other opportunities. For example, how about a new A6-based AppleTV box with quad-core GPU, and a $40 Apple wireless game controller? Now you have close to PS3/XBox 360 quality graphics, with games from major publishers and independent developers alike, downloadable right from the App Store. Bye bye consoles.
• Consumers would benefit by lower combined prices, consolidated billing, more flexible video subscription plans, and reduced points of contact for problems (with Apple's support being superior to any known cable, satellite, or phone company). Installation, setup, and upgrading would be easier (and likely done by the user in most cases, not requiring technicians). And that magic single Apple ID would now link and synchronize even more of a person's devices and data.
Currently a consumer might spend $120 on digital cable, $80 on cel phone service, and $50 on home internet. That's $250 per month on 2 to 3 different bills, and that's probably below average. Over $300 would not be uncommon with extra minute and text message plans, channel bundles, etc. Apple could easily offer a package for let's say $200 that includes unlimited minutes and text messages, and as many "channels" (and on demand content) as they could get rights to. They might offer a cheaper option for shows with advertising and a more expensive option for no advertising, or even an a la carte menu, which many people have been demanding from the cable companies for year, and they refuse. Live pro sports could be handled individually by the MLB, NBA, NFL, NHL apps.
Now let's say they offer the content providers a $5B to $10B pre-payment to secure content for a couple years. While they watch dwindling cable subscriber numbers , chances are they are not going to turn down money like that. If they can start with only 1 million subscribers (these could be Apple television sets, or new Apple TV boxes, it doesn't matter), at $200 per month each that's $2.4B per year (including the entire wireless package). Let's say they give 50% of that back to content providers, or $1.2B. That's not enough, but it's a start. They need enough cash flow to show the content providers that they should be taken seriously, and to slowly wrest control away from the cable companies. When subscribers grow to 10 million, we're talking $12B per year to content providers, which is, as they say "real money", while still making a nice profit on the services themselves (they'd have to spend some of that to maintain the network). Essentially, they would become a provider with the same stature as a Comcast, Cox, Time/Warner, albeit (we hope) a kinder, gentler, less infuriating one.
Thee's an insane amount of things that would have to go right for this to happen (including government regulators allowing it), but Apple is perhaps the only company in the world that could pull it off because of their highly-rated consumer brand and consumer trust, ecosystem, industry connections, and of course, giant cash reserves (they'd still have about $50B left over after this). If the things I listed went down, AT&T, Verizon, T-Mobile, Netflix, Amazon, Google, Comcast, Cox, Charter, Time/Warner, DirecTV, Dish, Sony, Microsoft, Nintendo, and others would immediately crap their collective pants.
and the world ends in USA borders.
By bye consoles? Game developers will end to develop for Sony or MS because in the USA there is an Apple TV with an A6 processor?