Time Warner Cable Inc. (TWC), the second-largest cable operator in the U.S., is launching new software that supports iPad applications to view live TV.
The application allows subscribers to enjoy live cable television viewing on the iPad while at home. Initially, the application will support thirty high definition cable channels but later more channels will be included.
But there are few drawbacks relating to the smooth functioning of the application. Firstly, the new application can only be used by those who are subscribing for both video and Internet services of Time Warner Cable. Secondly, it will only function at home when both the iPad and the company’s cable modem are linked through a Wi-Fi router.
Now-a-days, there are so many options available to the people to watch their favorite programs. So the customer’s expectations will gradually increase with the addition of more TV viewing options, which in turn will give rise to new degree of competitions.
There are few companies like Netflix Inc. (NFLX) and Hulu Inc., which supports downloading of movies and TV shows in the iPad, but does not support live TV. Comcast (CMCSA), the leader in the cable industry, declared that they will roll out their new application, which will support live TV by year-end 2011.
Few other cable companies boasting iPad applications perform dual functions. It is used for watching on-demand videos as well as it is used like TV remotes. But the new application by Time Warner Cable will not support remote functions nor does it give access to video on demand or shows stored on a digital video recorder.
Such functions will be incorporated in the coming years. Moreover, electronic instruments like laptops, smart phones and smart TVs will also benefit from the new applications in the coming years.
We, thus, maintain our long-term Neutral recommendation for Time Warner Cable Inc. Currently, Time Warner Cable Inc. has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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