By Philip Elmer-DeWitt
August 22, 2010

Will Apple TV’s successor, rumored for Sept. release, really destroy cable and satellite?

Kevin Rose, co-founder of Digg, made two bold predictions Saturday about the rumored update to what Steve Jobs calls his “hobby” — an Apple-branded gateway to the vast wasteland of American television. The product Engadget has been calling iTV, according to Rose, 1) is coming in September and 2) will “change everything.”

Never mind that Rose, who claims to have inside information about such things, has a mixed record as an Apple (AAPL) prognosticator. He was right about the iPod nano, but spectacularly wrong about the first iPhone, which according to him was going to have two batteries, a slide-out keyboard and run on both AT&T’s (T) and Verizon’s (VZ) networks.

Here’s what Rose says about iTV:

  • iOS TV apps: He expects to see an iPhone/Pad like marketplace for television applications with apps for video sharing, streaming and recording, interactive news apps, games, etc.
  • a la carte (app) stations: “With Apple’s iAds, content producers (e.g. ABC/NBC/etc.) can directly monetize and distribute their content,” which according to Rose will eventually destroy the television side of the cable and satellite industry. “Say goodbye to your monthly cable bill,” he cheerfully predicts.
  • .Me Picture/Video sharing: “At $99 your parents, grandparents, and friends will have an iTV.  Sharing pictures/videos from your iPhone will happen with the push of a button.”
  • The iPad as “one big badass remote control”: The iPad, he says, will be the preferred input device for the iTV.

A spirited discussion ensued on Rose’s blog. It wasn’t until about 6:30 p.m. Saturday that a commentator named Brad pointed out the fatal flaw in the “changes everything” argument.

“It isn’t outside the realm of possibility,” Brad wrote. But: “If this does kill the satellite/cable content end of things, say goodbye to reasonable monthly unlimited access rates.”

How is your grandmother going to watch those iPhone videos — or anything else — without the unlimited Internet access her local cable monopoly or functional equivalent provides?

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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