Reading between the lines of the
Wall Street Journal
‘s story Monday about Apple’s “assault” on the TV business, you can almost hear the desperation of the media executives who asked Apple (AAPL) to brief them on exactly what the wizards of Cupertino are up to.

These media executive — which included, presumably, Rupert Murdoch, whose News Corp. (NWS) owns the Journal — are reported to be worried about what’s going to happen to the $150 billion a year that the existing TV business generates in the U.S. alone from advertising and monthly cable TV subscriptions.

They should be worried. That pipeline of cash — extracted from viewers through monopoly cable pricing and intrusive ads that nobody wants to watch — is ripe for disruption by the same technology that hollowed out the music business a decade earlier. Case in point: Three hours after the season finale of Homeland was piped to Showtime’s 20 million paying customers Sunday night, digital copies of the show were available for downloading or streaming through BitTorrent, the peer-to-peer file-sharing protocol by which hundreds of millions of viewers around the world watch TV’s most popular shows — free and free of ads — on their computers.

No wonder the Murdochs of the world want to know what Steve Jobs had in mind when he told his biographer that he had “finally cracked” the TV problem. Could he have been preparing to do for the TV conglomerates what he did — for good or ill — to the music labels?

Conventional wisdom has it that Apple is working on a full-blown TV set, but there’s nothing in Monday’s Journal story that actually says that. In fact, the story quotes one unnamed source familiar with the media executives’ briefings who said that the types of new services Apple is discussing “could be done with Apple’s existing technologies, which include its Apple TV set-top box.” (emphasis ours)

Which brings us, as it often does, to Horace Dediu’s analysis of the situation. In a post published a week ago entitled “Hiding in plain sight,” he pointed out that nearly all of Apple’s most disruptive products have been sustaining improvements on existing products, technologies or platforms. For example:

• The iPad is an evolution of the iPod touch
• The iPod touch is an evolution of the iPhone
• The iPhone uses OS X and Objective C from the Mac
• OS X came from NeXT
• The app store market model came out of the iTunes store
• The iTunes store came from iTunes which came first to the Mac as a media sync tool for the iPod
• etc.

This, and the fact (as Steve Jobs himself reminded his 100 top staffers last year) that making TV sets is a low-margin, slow-turnover business, leads Dediu to conclude that the Apple TV that everybody is speculating about is the Apple TV the company is already selling. In his words:

“A wonderfully asymmetric product begging to be ignored. A product that because of its apparent lack of success, effectively hides all its secrets in plain sight.”