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Apple's getting ready to take on Hollywood.

By Don Reisinger
February 16, 2017

Apple might be working on a new Apple TV to boost its presence in the home-entertainment business, according to a new report.

The tech giant is currently testing a fifth-generation Apple TV, codenamed “J105,” Bloomberg is reporting, citing people who claim to have knowledge of its plans. The device will support Ultra HD video streaming and could deliver better color accuracy than its predecessor, according to the report. If all goes well, Apple could release the new Apple TV sometime this year.

But Bloomberg‘s sources say it wasn’t supposed to be this way. Apple AAPL had plans years ago to, in its own words, “revolutionize” TV. The company had hopes of replacing cable boxes with its own set-top box and ink deals with content companies that would let it stream live television over its Apple TV.

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Instead, Apple has released Apple TV updates with only half-baked steps in those directions.

The company’s Apple TV was, before the fourth-generation release in 2015, a streaming box that would play content from video services like Netflix NFLX and Hulu. The fourth-generation model added storage and support for third-party apps, including video games, but only streams live programming through apps like DirecTV Now. Apple itself doesn’t offer a foundation on which media companies are jumping to offer their live programming.

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“I signed up for revolutionary,” a person on the Apple TV team told Bloomberg. “We got evolutionary.”

Apple hasn’t commented much on its broader strategy for the Apple TV and its desired place in entertainment. But rumors about the company’s plans for the industry have been running rampant. On live television, for instance, reports surfaced last year saying Apple senior vice president of Internet software and services Eddy Cue had floated the idea with media companies of an Apple-developed live-television surface. Talks reportedly broke down.

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Since then, rumors have suggested Apple is considering making a big media company buy to acquire original content and bolster its entertainment offerings. A report last year said Apple was interested in Time Warner and Netflix. But after AT&T T announced plans to acquire Time Warner TWX in the fall, now only Netflix has been said to be under consideration.

But even that has been called into question after Cue said at the Code Media conference in Dana Point, Calif. this week that Apple has no interest in a media company buy. Instead, Cue said that Apple wants to create “unique” content and not “do what everybody else is doing.” He didn’t elaborate on Apple’s plan beyond talk of the company’s first original series, Planet of the Apps, a reality show that follows app developers in their quest for investment funding.

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It’s unclear whether the fifth-generation Apple TV will finally deliver on Apple’s grand ambitions. But if nothing else, it appears Apple is committed to the Apple TV. Earlier this month, Apple hired the head of Amazon’s Fire TV division, Timothy Twerdhal, to lead Apple TV. Twerdhal previously worked on the hardware and software in Amazon’s AMZN set-top box business.

Twerdhal’s charge: succeed in a home entertainment business that, based on recent history, has been difficult for Apple to navigate.

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